Invesco Ltd (IVZ) 2018年年度報告「NYSE」.pdf

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1、TableofContents UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549Form 10-K(MarkOne)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2018ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCH

2、ANGE ACT OF 1934For the transition period from to Commission file number 1-13908Invesco Ltd.(Exact Name of Registrant as Specified in Its Charter)Bermuda(State or Other Jurisdiction of Incorporation or Organization)98-0557567(I.R.S.Employer Identification No.)1555 Peachtree Street,N.E.,Suite 1800,At

3、lanta,GA(Address of Principal Executive Offices)30309(Zip Code)Registrants telephone number,including area code:(404)892-0896Securities registered pursuant to Section 12(b)of the Act:Title of Each ClassName of Exchange on Which RegisteredCommonShares,$0.20parvaluepershareNewYorkStockExchangeSecuriti

4、es registered pursuant to Section 12(g)of the Act:NoneIndicatebycheckmarkiftheregistrantisawell-known,seasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesNooIndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesoNoIndicatebycheckmarkwhetherthereg

5、istrant:(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesNooIndicatebycheckmarkwhethertheregistrantha

6、ssubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-Tduringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).YesNooIndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-K(229.405ofthisch

7、apter)isnotcontainedherein,andwillnotbecontained,tothebestofregistrantsknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.oIndicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfile

8、r,smallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”andemerginggrowthcompanyinRule12b-2oftheExchangeAct.(Checkone):LargeacceleratedfilerAcceleratedfileroNon-acceleratedfileroSmallerreportingcompanyo Emerginggrowt

9、hcompanyoIfanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.oIndicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2ofth

10、eExchangeAct.)YesoNoAtJune30,2018,theaggregatemarketvalueofthevotingstockheldbynon-affiliateswas$10.7billion,basedontheclosingpriceoftheregistrantsCommonShares,parvalueU.S.$0.20pershare,ontheNewYorkStockExchange.AtJanuary31,2019,themostrecentpracticabledate,thenumberofCommonSharesoutstandingwas397,0

11、71,683.DOCUMENTS INCORPORATED BY REFERENCETheregistrantwillincorporatebyreferenceinformationrequiredinresponsetoPartIII,Items10-14initsdefinitiveProxyStatementforitsannualmeetingofshareholders,tobefiledwiththeSecuritiesandExchangeCommissionwithin120daysafterDecember31,2018.1TableofContents TABLE OF

12、CONTENTSWeincludecrossreferencestocaptionselsewhereinthisAnnualReportonForm10-K,whichwerefertoasthis“Report,”whereyoucanfindrelatedadditionalinformation.Thefollowingtableofcontentstellsyouwheretofindthesecaptions.PageSpecialCautionaryNoteRegardingForward-LookingStatements3PART IItem1.Business4Item1A

13、.RiskFactors12Item1B.UnresolvedStaffComments28Item2.Properties28Item3.LegalProceedings28Item4.MineSafetyDisclosures28PART IIItem5.MarketforRegistrantsCommonEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities28Item6.SelectedFinancialData30Item7.ManagementsDiscussionandAnalysisofFinan

14、cialConditionandResultsofOperations30Item7A.QuantitativeandQualitativeDisclosuresAboutMarketRisk72Item8.FinancialStatementsandSupplementaryData77Item9.ChangesinandDisagreementsWithAccountantsonAccountingandFinancialDisclosure130Item9A.ControlsandProcedures130Item9B.OtherInformation130PART IIIItem10.

15、Directors,ExecutiveOfficersandCorporateGovernance130Item11.ExecutiveCompensation130Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholderMatters130Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence131Item14.PrincipalAccountantFeesandServices131PART

16、 IVItem15.ExhibitsandFinancialStatementSchedules131Item16.Form10-KSummary131Exhibits131Signatures1352TableofContents SPECIAL CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Report,other public filings and oral and written statements by us and our management,may include statements that const

17、itute“forward-lookingstatements”withinthemeaningoftheUnitedStatessecuritieslaws.Thesestatementsarebasedonthebeliefsandassumptionsofourmanagementandoninformationavailabletousatthetimesuchstatementsaremade.Forward-lookingstatementsincludeinformationconcerningfutureresultsofouroperations,expenses,earni

18、ngs,liquidity,cashflowsandcapitalexpenditures,industryormarketconditions,assetsundermanagement,acquisitionsanddivestitures,debtandourabilitytoobtainadditionalfinancingormakepayments,regulatorydevelopments,demandforandpricingofourproducts,theprospectsforcertainlegalcontingencies,andotheraspectsofourb

19、usinessorgeneraleconomicconditions.Inaddition,whenusedinthisReportorsuchotherdocumentsorstatements,wordssuchas“believes,”“expects,”“anticipates,”“intends,”“plans,”“estimates,”“projects,”“forecasts,”andfutureorconditionalverbssuchas“will,”“may,”“could,”“should,”and“would,”andanyotherstatementthatnece

20、ssarilydependsonfutureevents,areintendedtoidentifyforward-lookingstatements.Forward-lookingstatementsarenotguaranteesandtheyinvolverisks,uncertaintiesandassumptions.Althoughwemakesuchstatementsbasedonassumptionsthatwebelievetobereasonable,therecanbenoassurancethatactualresultswillnotdiffermaterially

21、fromourexpectations.Inmostcases,suchassumptionswillnotbeexpresslystated.Wecautioninvestorsnottorelyundulyonanyforward-lookingstatements.Thefollowingimportantfactors,andotherfactorsdescribedelsewhereinthisReportorcontainedinourotherfilingswiththeU.S.SecuritiesandExchangeCommission(SEC),amongothers,co

22、uldcauseourresultstodiffermateriallyfromanyresultsdescribedinanyforward-lookingstatements:significantfluctuationsintheperformanceofcapitalandcreditmarketsworldwide;adversechangesintheglobaleconomy;theperformanceofourinvestmentproducts;significantchangesinnetassetflowsintooroutoftheaccountswemanageor

23、declinesinmarketvalueoftheassetsin,orredemptionsorotherwithdrawalsfrom,thoseaccounts;competitivepressuresintheinvestmentmanagementbusiness,includingconsolidation,whichmayforceustoreducefeesweearn;anyinabilitytoadjustourexpensesquicklyenoughtomatchsignificantdeteriorationinmarkets;theeffectoffluctuat

24、ionsininterestrates,liquidityandcreditmarketsintheU.S.orglobally,includingregulatoryreformofbenchmarks,suchasLIBOR;ourabilitytoacquireandintegrateothercompaniesintoouroperationssuccessfullyandtheextenttowhichwecanrealizeanticipatedproductsales,costsavingsorsynergiesfromsuchacquisitions;theoccurrence

25、ofbreachesanderrorsintheconductofourbusiness,includinganyfailuretoproperlysafeguardconfidentialandsensitiveinformation,cyber-attacksoractsoffraud;ourabilitytoattractandretainkeypersonnel,includinginvestmentmanagementprofessionals;limitationsorrestrictionsonaccesstodistributionchannelsforourproducts;

26、ourabilitytodevelop,introduceandsupportnewinvestmentproductsandservices;ourabilitytocomplywithclientcontractualrequirementsand/orinvestmentguidelinesdespitepreventativecomplianceproceduresandcontrols;variationsindemandforourinvestmentproductsorservices,includingterminationornon-renewalofourinvestmen

27、tmanagementagreements;harmtoourreputation;ourabilitytomaintainourcreditratingsandaccessthecapitalmarketsinatimelymanner;ourdebtandthelimitationsimposedbyourcreditfacility;exchangeratefluctuations,especiallyasagainsttheU.S.Dollar;theeffectofpolitical,economicorsocialinstabilityinorinvolvingcountriesi

28、nwhichweinvestordobusiness(includingtheeffectofterroristattacks,warandotherhostilities);theeffectoffailuresordelaysinsupportsystemsorcustomerservicefunctions,andotherinterruptionsofouroperations;theeffectofnon-performancebyourcounterparties,thirdpartyserviceprovidersandotherkeyvendorstofulfilltheiro

29、bligations;impairmentofgoodwillandotherintangibleassets;adverseresultsinlitigationandanyotherregulatoryorotherproceedings,governmentalinvestigations,andenforcementactions;andenactmentofadversefederal,stateorforeignlegislationorchangesingovernmentpolicyorregulation(includingaccountingstandards)affect

30、ingouroperations,ourcapitalrequirementsorthewayinwhichourprofitsaretaxed.3TableofContents Otherfactorsandassumptionsnotidentifiedabovewerealsoinvolvedinthederivationoftheseforward-lookingstatements,andthefailureofsuchotherassumptionstoberealizedmayalsocauseactualresultstodiffermateriallyfromthosepro

31、jected.Formorediscussionoftherisksaffectingus,pleaserefertoItem1A,“RiskFactors.”Youshouldconsidertheareasofriskdescribedaboveinconnectionwithanyforward-lookingstatementsthatmaybemadebyusandourbusinessesgenerally.Weexpresslydisclaimanyobligationtoupdateanyoftheinformationinthisoranyotherpublicreporti

32、fanyforward-lookingstatementlaterturnsouttobeinaccurate,whetherasaresultofnewinformation,futureeventsorotherwise.Forallforward-lookingstatements,weclaimthe“safeharbor”providedbySection27AoftheSecuritiesActof1933,asamended,andSection21EoftheSecuritiesExchangeActof1934,asamended.PART IItem 1.BusinessI

33、ntroductionInvescoLtd.(Invescoorthecompany)isanindependentinvestmentmanagementfirmdedicatedtodeliveringaninvestmentexperiencethathelpspeoplegetmoreoutoflife.Ourcomprehensiverangeofactive,passiveandalternativeinvestmentcapabilitieshasbeenconstructedovermanyyearstohelpclientsachievetheirinvestmentobje

34、ctives.Wedrawonthiscomprehensiverangeofcapabilitiestoprovidecustomizedsolutionsdesignedtodeliverkeyoutcomesalignedtoclientneeds(ourmostimportantbenchmark).Withmorethan7,000employeesandanon-the-groundpresencein25countries,Invescoiswellpositionedtomeettheneedsofinvestorsacrosstheglobe.Wehavespecialize

35、dinvestmentteamsmanaginginvestmentsacrossabroadrangeofassetclasses,investmentstylesandgeographies.Weprovideacomprehensiverangeofinvestmentcapabilitiesandoutcomes,deliveredthroughadiversesetofinvestmentvehicles,tohelpclientsachievetheirinvestmentobjectives.Fordecades,individualsandinstitutionshavevie

36、wedourorganizationasatrustedpartnerforabroadrangeofinvestmentneeds.WehaveasignificantpresenceintheretailandinstitutionalmarketswithintheinvestmentmanagementindustryinNorthAmerica,EMEA(Europe,MiddleEastandAfrica)andAsia-Pacific,servingclientsinmorethan120countries.AsofDecember31,2018,thefirmmanaged$8

37、88.2billioninassetsforinvestorsaroundtheworld.ThekeydriversofsuccessforInvescoarelong-terminvestmentperformance,competitivepricing,high-qualityclientserviceandeffectivedistributionrelationships,deliveredacrossadiversespectrumofinvestmentmanagementcapabilities,distributionchannels,geographicareasandm

38、arketexposures.Byachievingsuccessintheseareas,weseektodeliverbetteroutcomesforclientsandgeneratecompetitiveinvestmentresults,positivenetflows,increasedassetsundermanagement(AUM)andassociatedrevenues.Weareaffectedsignificantlybymarketmovements,whicharebeyondourcontrol;however,weendeavortomitigatethei

39、mpactofmarketmovementsbymaintainingbroaddiversificationacrossassetclasses,investmentvehicles,clientdomicilesandgeographies.Wemeasurerelativeinvestmentperformancebycomparingourinvestmentcapabilitiestocompetitorsproducts,industrybenchmarksandclientinvestmentobjectives.Generally,distributors,investment

40、advisorsandconsultantstakeintoconsiderationlonger-terminvestmentperformance(e.g.,three-yearandfive-yearperformance)intheirselectionofinvestmentproductsandmanagerrecommendationstotheirclients,althoughshorter-termperformancemayalsobeanimportantconsideration.Third-partyratingsmayalsoinfluenceclientinve

41、stmentdecisions.Wemonitorqualityofclientserviceinavarietyofways,includingperiodicclientsatisfactionsurveys,analysisofresponsetimesandredemptionrates,competitivebenchmarkingofservicesandfeedbackfrominvestmentconsultants.InvescoLtd.isorganizedunderthelawsofBermuda,andourcommonsharesarelistedandtradedo

42、ntheNewYorkStockExchangeunderthesymbol“IVZ.”W.(Informationcontainedonourwebsiteshallnotbedeemedtobepartof,orbeincorporatedinto,thisdocument).StrategyThecompanyfocusesonfourkeylong-termstrategicobjectivesthataredesignedtosharpenourfocusonclientneeds,furtherstrengthenourbusinessovertimeandhelpensureou

43、rlong-termsuccess:Achieve strong,long-term investment performance acrossdistinctinvestmentcapabilitieswithclearlyarticulatedinvestmentphilosophiesandprocesses,alignedwithclientneeds;Be instrumental to our clients success bydeliveringourdistinctiveinvestmentcapabilitiesworldwidetomeettheirneeds;4Tabl

44、eofContents Harness the power of our global platform bycontinuouslyimprovingexecutioneffectivenesstoenhancequalityandproductivity,andallocatingourresourcestotheopportunitiesthatwillbestbenefitclientsandourbusiness;andPerpetuate a high-performance organization bydrivinggreatertransparency,accountabil

45、ity,diversityofthought,fact-baseddecisionmakingandexecutionatalllevels.Asanintegratedglobalinvestmentmanager,wearekeenlyfocusedonmeetingclientsneedsandoperatingeffectivelyandefficientlyasanintegrated,globalorganization.Wetakeaunifiedapproachtoourbusinessandpresentourfinancialstatementsandotherdisclo

46、suresunderthesingleoperatingsegment“investmentmanagement.”WebelieveoneofInvescosgreatstrengthsisourseparate,distinctinvestmentteamsinmultiplemarketsacrosstheglobe.Akeyfocusofourbusinessisfosteringastronginvestmentcultureandprovidingthesupportthatenablesourinvestmentteamstomaintainwell-performinginve

47、stmentcapabilities.Webelievetheabilitytoleveragethecapabilitiesofourinvestmentteamstohelpclientsacrosstheglobeachievetheirinvestmentobjectivesisasignificantdifferentiatorforourfirm.2018 DevelopmentsThroughout2018,wemadesolidprogressinseveralareasthatwillhelpusbettermeetclientneeds,furtherstrengtheno

48、urglobalbusinessandincreaseshareholdervalueoverthelongterm.Atthesametime,2018wasachallengingyearfortheassetmanagementindustryandforInvesco.Wesawvolatilemarketsthroughouttheyearandparticularlyduringthefourthquarter.Thesemarketheadwinds,combinedwithunderperformanceincertaininvestmentcapabilitiesandcha

49、llengesintheglobalmarketsinwhichweoperate-suchastheuncertaintiessurroundingBrexitandthetradewarbetweentheU.S.andChina-ledtonegativenetflowsforthefirmin2018afternineconsecutiveyearsofpositivenetflows.During2018,welaunchedseveralnewproductsandfurtherinvestedinkeypartsofourbusinessthatwillbenefitourcli

50、entsandenhanceourcompetitivenessoverthelongterm.Wecontinuedtoinvestincapabilitieswhereweseestrongclientdemandorfutureopportunitiesbymakingoragreeingtomakecertainacquisitions,hiringworld-classtalent,upgradingourtechnologyplatform,launchingnewproductsandprovidingadditionalresourceswherenecessary.Webel

51、ievetheabilitytoleveragethecapabilitiesdevelopedbyourinvestmentteamstomeetclientdemandacrosstheglobeisasignificantdifferentiatorforourfirm,andwewillcontinuetobringthebestofInvescotodifferentpartsofourbusinesswhereitmakessenseforourclients.Somehighlightsof2018areasfollows:Themostsignificantannounceme

52、ntduringtheyearwasourplannedacquisitionofMassachusettsMutualLifeInsuranceCompanys(MassMutual)assetmanagementaffiliate,OppenheimerFunds.ThecombinationwithOppenheimerFundswillhelpaccelerateInvescosgrowthinitiatives,increaseourscaleandclientrelevance,andexpandourcomprehensivesuiteofdifferentiatedinvest

53、mentcapabilities.Wewillalsobebetterpositionedtodeliverstrongoutcomesforclients,sinceoverallperformancerankingsforU.S.mutualfundsareconsistentlystrongerforthecombinedfirmthanforeitherfirmindependently.InvescoenteredintoadefinitiveagreementtoacquireOppenheimerFundsfromMassMutual,whichincluded$226.9bil

54、lion(1)ofAUMatJanuary31,2019.ThisstrategictransactionwillbringInvescostotalAUMtomorethan$1.1trillion,makingitthe13th-largestglobalinvestmentmanagerandsixth-largestU.S.retailinvestmentmanager(2),furtherenhancingthecompanysabilitytomeetclientneedsthroughitscomprehensiverangeofhigh-convictionactive,pas

55、siveandalternativecapabilities;CompletedtheacquisitionofGuggenheimInvestmentsexchange-tradedfunds(ETF)business.TheacquisitionstrengthenedInvescosmarket-leadingETFcapabilitiesaswellasthefirmseffortstomeettheneedsofinstitutionalandretailclientsintheU.S.andacrosstheglobe,whichwillcontributefurthertothe

56、growthandlong-termsuccessofthebusiness;CompletedtheacquisitionofIntelliflo,theNo.1technologyplatform(3)forfinancialadvisorsintheUK.TheadditionofIntelliflobuildsonthe2016acquisitionofJemsteptoenableanadvisor-focuseddigitalplatformthatenhancesthefirmsabilitytomeetevolvingclientneeds;Furtherstrengthene

57、dourmarket-leadingsolutionscapability,leveragingoneoftheindustrysstrongest,mostexperiencedsolutionsteamstoenablecustomizedoutcomesforclients;Continuedtoenhanceourcultureandprovidedevelopmentopportunitiesforourtalentedprofessionalsacrosstheglobe;InvescoGreatWallFundManagementCompany(InvescoGreatWall)

58、,thecompanyslargestjointventureinChina,isexperiencingstronggrowth.InJune,InvescoGreatWallsJingyiMoneyMarketFundwasselectedasoneofsevenmoneymarketfundstobeincludedinthemoneymarketprogram,YuEBao,administeredbyAntFinancial,anaffiliateofAlibaba;Invescohaslaunchedafixedincomefundforinvestorstobuyintoinve

59、stmentopportunitiesdrivenbyChinasBeltandRoad(B&R)initiative;5TableofContents InvescoGreatWallwonnumerousindustryawardsduringtheAssetManagementAssociationofChinasinauguraleventtomarkthe20thanniversaryoftheestablishmentofChinasfundindustry;Invescowonthe2018MultiAssetManageroftheyearaward,whichwasgiven

60、attheLAPFInvestmentAwardsheldinLondon;InvescoearnedanA+ratinginPRI(PrinciplesforResponsibleInvestment)foritsoverallapproachtoresponsibleinvestmentforsecondconsecutiveyear;Invescowasnamedthebest-performingETFintheU.S.SmallCapHealthcareandSoftwarecategories;In2018,Invescowasnamedoneofthebestplacestowo

61、rkinmoneymanagementbyPensions and Investments.Takentogether,thisworkfurtherexpandedthebroadrangeofcapabilitiesInvescousestocreatesolutionsthatdelivertheoutcomesclientsareseeking,allwrappedinarobust,value-addedclientexperience.Theseinitiativesalsofurtherstrengthenthefirmseffectivenessandefficiency,pr

62、ovidinggreatereconomiesofscalethatwillenableustoprovideahigherlevelofvaluetoclientsandfurtherimproveourcompetitiveposition._(1)Source:OppenheimerFunds(2)DataasofDecember31,2018(3)Platform-AdviserMarket:FintechandDigital,January2018reportIndustry TrendsTrendsaroundtheworldcontinuetotransformtheinvest

63、mentmanagementindustryandunderscoretheneedtobewelldiversifiedwithbroadcapabilitiesgloballyandacrossassetclasses:Clientsaredemandingmorefrominvestmentmanagers.Whileinvestmentperformanceremainsparamount,competitivepricing,clientengagementandvalue-addedservices(includingportfolioanalyticsandprovidingco

64、nsultativesolutions)increasinglydifferentiatemanagers.Invescoisworkingtoenhancetheclientsuserexperiencethroughdigitalmarketing(web,mobile,social)andimprovedservice.ThebuildingoutofInvescoSolutionstorespondtothistrendisamongthefirmstoppriorities.Investorsarecontinuingtoshifttoalternative,passive,ands

65、martbetastrategies.Asaconsequence,Invescoandtheindustryareseeingclientdemandforcoreequitiesandfixedincomeportfoliosdeclineasashareofglobalflows.Invescoisthe#2providerofsmartbetaAUMgloballyandhas60ETFswithgreaterthan$500millioninassets.(1)Invescoalsohasastronglineupofalternativeandmulti-assetstrategi

66、essupportedbyongoingproductdevelopment.Weareseeingincreasedpressureonpricingwithintheassetmanagementindustry,arisingfromfurtherconcentrationwithinourchanneldistributionpartners(whichincreasestheirabilitytonegotiatepricing)andadditionalregulatoryscrutinyonindustryfees.Distributionpartnersarebecomingm

67、oreselectiveandaremovingtowardsdevelopingfewerrelationshipsandpartners,reducingthenumberofinvestmentmanagerswithwhomtheywork.Regulatoryactivityremainsatincreasedlevelsandisinfluencingcompetitivedynamics.Increasedregulatoryscrutinyofmanagershasfocusedonmanyareasincludingtransparency/unbundlingoffees,

68、inducements,conflictsofinterest,capital,liquidity,solvency,leverage,operationalriskmanagement,controlsandcompensation.Invescocontinuestoproactivelyworkwithregulatorsaroundtheworld.Effortstofurthermodernizeandstrengthenourglobalplatformwillenhanceourabilitytocompeteeffectivelyacrossmarketswhilecomply

69、ingwiththevarietyofapplicableregulatoryregimes.AlthoughthedevelopedmarketsintheU.S.andEuropearecurrentlythetwolargestmarketsforfinancialassetsbyawidemargin,otherkeyemergingmarketsintheworld,suchasChinaandIndia,arepositionedforfuturegrowthoverthelongtermdespitenear-termheadwinds.Asthesepopulation-hea

70、vymarketsmature,webelieveinvestmentmanagersthataretrulyglobalwillbeinthebestpositiontocapturethisgrowth.Additionally,populationagedifferencesbetweenemerginganddevelopedmarketswillresultindifferinginvestmentneedsandhorizonsamongcountries.Assetallocationandretirementsavingsschemesalsodiffersubstantial

71、lyamongcountries.WebelievefirmssuchasInvesco,withdiversifiedinvestmentcapabilitiesandproducttypes,arebestpositionedtomeetclientsneedsinthisglobalcompetitivelandscape.Invescohasameaningfulmarketpresenceinmanyoftheworldsmostattractiveregions,includingNorthAmerica,EMEAandAsia-Pacific.Webelieveourstrong

72、andgrowingpresenceinestablishedandemergingmarketsprovidessignificantlong-termgrowthpotentialforourbusiness.6TableofContents Technologyadvancesareimpactingcoreelementsoftheinvestmentmanagementindustrywhichlagsotherindustriesinitsuseoftechnology.Clientsincreasinglyseektointeractdigitallywiththeirinves

73、tmentportfolios.Thisisleadingtoestablishedmanagersinvestinginand/oracquiringroboplatforms.Astheinvestmentmanagementbusinessbecomesmorecomplex,automationwillbecomeincreasinglyimportanttoserveclientseffectivelyandefficiently.Invescoisleveragingtechnologyacrossitsbusinessandexploringopportunitiestowork

74、withthird-partytechnologyfirmstoenhanceourclientsinvestmentexperience.ThisincludestheadditionofJemstep,ouradvisor-powereddigitaladvicecapability,toofferdigitaladviceasameansforstrengtheningexistingclientrelationshipsbyofferingacomprehensivewealthmanagementservice.TheadditionofIntelliflotoourexisting

75、Jemstepcapabilitystrengthensourabilitytoenableanadvisor-focuseddigitalplatformandpositionsusaheadofevolvingclientneeds.Asaresultofthetrendsdiscussedabove,clientsareseekingtoworkwithasmallernumberofassetmanagerswhocanmeetacomprehensivesetofneeds.Theywantmoneymanagerswhocanprovidearobustsetofcapabilit

76、iesandcreateinvestmentsolutionsthatdeliverkeyoutcomesalignedtotheirinvestmentobjectives.Theyalsowantgreatervaluefortheirmoney,whichmeanscompetitivepricing,investoreducation,thoughtleadership,digitalplatformsandothervalueaddedservicesthatcreateanenhancedclientexperience.Thesedynamicsaredrivingfundame

77、ntalchangeswithinourindustryandthatwebelievewilldriveincreasingconsolidation.Webelievethestepswehavetakenoverthepastdecadeandthroughout2018strengthenedourabilitytomeetclientneedsandwillhelpensureInvescoiswell-positionedtocompeteandwinwithinourindustry._(1)InvescoandMorningstardataasofDecember31,2018

78、Other External Factors Impacting InvescoInvescohasalargerglobalpresenceinkeymarketsthanmostofourpeers.AsoneoftheleadinginvestmentmanagersintheUKandEurope,weweremoreimpactedbycontinuinguncertaintiessurroundingBrexit.Additionally,ourstrongpositioninAsiaPacificmeantthatInvescowasmoreaffectedthanothersb

79、ymarketuncertaintiesoverthetradeissuesbetweenChinaandtheU.S.In2016,theUKelectoratevotedtoleavetheEuropeanUnion.WithdrawalisscheduletooccuronMarch29,2019.Atthistime,thetermsofthewithdrawalandtheUKsfuturerelationshipwiththeEUarenotagreed.Ifthewithdrawaltreatyisagreedintime,Invescowouldbeabletooperateo

80、nabusiness-as-usualbasisduringatransitionalperiodwhilethefulldetailsoftheUKsfuturerelationshipwiththeEUbecomedefined;however,iftheUKleavestheEUonMach29,2019withoutawithdrawalagreementinplace,therewouldbeconsiderableuncertainty,includinguncertaintyaboutcontinuingtradebetweentheUKandtheEU.OnJanuary30,

81、2019,EU27nationalregulatorsreachedagreementwiththeUKsFinancialConductAuthoritytoensurethecontinuedpracticeof“delegation”intheeventofaBrexitwithoutawithdrawalagreementinplace.DelegationallowsfundstocontinuetobemanagedintheUKwhilebeingdomiciledinanotherEUcountry.Thisagreementwillpreventdisruptionforfu

82、ndgroupsandhelpinBrexitcontingencyplanning,whichwillhelpmaintainmarketstabilityintheEUandensureinvestorprotection.Theremaybesomedisruptionfornon-fundaccounts.TheUKeconomyhasbeeninaperiodofuncertaintywithvolatilityexpectedinfinancialmarketsuntilthetermsofwithdrawalareagreedupon.Webelieveuncertaintyin

83、themarketswasafactorinthedeclineinAUMwithinourUKoperations,whereAUMfromclientsdomiciledintheUKwere$85.1billionatDecember31,2018(December31,2017:$110.9billion).AtDecember31,2018approximately6%ofourAUMareUKentitiesprovidinginvestmentservicestoEU-basedfundmanagementsubsidiariesandEU-basedclients.Mostof

84、thisactivityisanticipatedtobeabletocontinueevenifaformalUKexitagreementisnotreached.Invescoisaglobalbusiness,andhasbeencommittedformanyyearstomeetingclientsneedsacrossEuropeinbothEUandnon-EUcountries.Invescohaslocalteamsofexpertsfocusedonservicinglocalclientsandfundrangesindifferentcountriestomeetav

85、arietyoflocal,countryandregionalclientneeds.Wecurrentlyhaveapresencein11memberstatesacrosstheEU(excludingtheUK),employingover370staff;ourstaffwillbeabletocontinuetoresideandworkacrosstherelevantregions.ThechangeintheUKsstatusfromanEUtoanon-EUcountrywillnotchangeInvescosfocusorcommitmenttoserveitscli

86、entsacrossEurope.Wehaveplansinplacewhichwillenableustorespondtoavarietyofdifferentpotentialscenariosandwebelievewearefullypreparedtocontinuetooperateanddeliverforourclientswithminimaldisruption.Investment Management CapabilitiesWebelievethattheprovenstrengthofourdistinctandgloballylocatedinvestmentt

87、eamsandtheirwell-definedinvestmentdisciplinesandriskmanagementapproachprovideuswitharobustcompetitiveadvantage.Therearefewindependent7TableofContents investmentmanagerswithteamsasgloballydiverseasInvescosandwiththesamebreadthanddepthofinvestmentcapabilitiesandvehicles.Weoffermultipleinvestmentobject

88、iveswithinthevariousassetclassesandproductsthatwemanage.Ourassetclasses,broadlydefined,includemoneymarket,balanced,equity,fixedincomeandalternatives.Thefollowingsetsforthourmanagedinvestmentobjectivesbyassetclass:Money Market Balanced Equity Fixed Income AlternativesCashPlusBalancedRiskEmergingMarke

89、tsConvertiblesAbsoluteReturnGovernment/TreasuryGlobal/RegionalInternational/GlobalCore/CorePlusCommoditiesPrimeSingleCountryLargeCapCoreEmergingMarketsCurrenciesTaxableTargetDateLargeCapGrowthEnhancedCashFinancialStructuresTax-FreeTargetRiskLargeCapValueGovernmentBondsGlobalMacroCustomSolutionsTradi

90、tionalBalanced LowVolatility/DefensiveHigh-YieldBondsLong/ShortEquityCustomSolutionsMidCapCoreInternational/GlobalManagedFuturesMidCapGrowthInvestmentGradeCreditMulti-AlternativesMidCapValueMulti-SectorPrivateCapitalPassive/EnhancedMunicipalBondsPrivateRealEstateRegional/SingleCountryPassive/Enhance

91、dPublicRealEstateSecuritiesSectorFundsShortDurationSeniorSecuredLoansSmallCapCoreStableValueStressed/DistressedDebtSmallCapGrowthStructuredSecuritiesCustomSolutionsSmallCapValueEnvironmental,SocialandGovernanceEnvironmental,SocialandGovernanceSmartBeta/Factor-basedSmartBeta/Factor-basedCustomSolutio

92、nsCustomSolutionsDistribution ChannelsRetailAUMoriginatesfromclientsinvestingintofundsavailabletothepublicintheformofsharesorunits.InstitutionalAUMoriginatesfromentitiessuchasindividualcorporateclients,insurancecompanies,endowments,foundations,governmentauthorities,universitiesorcharities.AUMdisclos

93、urebydistributionchannelrepresentsconsolidatedAUMdistributedbytypeofsalesteam(thecompanysinternaldistributionchannels).AUMamountsdisclosedasretailchannelAUMrepresentsAUMdistributedbythecompanysretailsalesteam;whereasAUMamountsdisclosedasinstitutionalchannelAUMrepresentsAUMdistributedbythecompanysins

94、titutionalsalesteam.Thecompanyoperatesasanintegratedglobalinvestmentmanager,presentingitselfasasinglefirmtoclientsaroundtheworld.Thisissupportedwiththecross-sellingofinvestmentcapabilitiesgloballyandintegratedinternalsalesforces.Asaresult,thecompanysretailandinstitutionalsalesforcesareabletosellprod

95、uctsthatcrossovertraditionaldelineationsofretailorinstitutionalvehicletypes.Therefore,notallproductssoldinthedisclosedretaildistributionchannelareretailproducts,andnotallproductssoldinthedisclosedinstitutionalchannelareinstitutionalproducts.Thisaggregation,however,isviewedasaproxyforpresentingAUMint

96、heretailandinstitutionalmarketsinwhichweoperate.8TableofContents Thefollowinglistsourprimaryinvestmentvehiclesbydistributionchannel:Retail InstitutionalClosed-endMutualFundsCollectiveTrustFundsExchange-tradedFunds(ETF)Exchange-tradedFunds(ETF)IndividualSavingsAccounts(ISA)InstitutionalSeparateAccoun

97、tsInvestmentCompanieswithVariableCapital(ICVC)Open-endMutualFundsInvestmentTrustsPrivateCapitalFundsOpen-endMutualFundsSeparatelyManagedAccounts(SMA)SocitdinvestissementCapitalVariable(SICAV)UnitInvestmentTrusts(UIT)VariableInsuranceFundsRetailRetailAUMwere$566.7billionatDecember31,2018.Weofferretai

98、lproductswithinallofthemajorassetclasses.Ourretailproductsareprimarilydistributedthroughthird-partyfinancialintermediaries,includingmajorwirehouses,fundsupermarkets,regionalbroker-dealers,insurancecompanies,banksandfinancialplannersinNorthAmerica,andindependentbrokersandfinancialadvisors,banksandsup

99、ermarketplatformsinEuropeandAsia.TheU.K.,NorthAmericanandContinentalEuropeanretailoperationsrankamongthelargestbyAUMintheirrespectivemarkets.AsofDecember31,2018,InvescoholdsaleadingpositionamongstretailfundprovidersintheU.K.;InvescosU.S.retailbusiness,includingourETFfranchise,isthe10thlargestfundcom

100、plexintheU.S.bylong-termassetsandInvescoinContinentalEuropewasamongthelargestnon-proprietaryinvestmentmanagersintheretailchannel.InvescoGreatWallwasoneofthelargestSino-foreignmanagersofequityproductsinChina,withtotalAUMofapproximately$26.9billionasofDecember31,2018.Weprovideourretailclientswithoneof

101、theindustrysmostrobustandcomprehensiveproductlines.InstitutionalInstitutionalAUMwere$321.5billioninAUMasofDecember31,2018.Weofferabroadsuiteofdomesticandglobalstrategies,includingtraditionalandquantitativeequities,fixedincome(includingmoneymarketfundsforinstitutionalclients),realestate,privateequity

102、,financialstructuresandabsolutereturnstrategies.Regionalsalesforcesdistributeourproductsandprovideservicestoclientsandintermediariesaroundtheworld.Wehaveadiversifiedclientbasethatincludesmajorpublicentities,corporations,unions,non-profitorganizations,endowments,foundations,pensionfunds,financialinst

103、itutionsandsovereignwealthfunds.Invescosinstitutionalmoneymarketfundsservesomeofthelargestfinancialinstitutions,governmententitiesandcorporationsintheworld.AUM DiversificationOneofInvescosgreatestcompetitivestrengthsisthediversificationinitsAUMbyclientdomicile,distributionchannelandassetclass.Ourdis

104、tributionnetworkhasattractedassetsof64%retailand36%institutionalasofDecember31,2018.Byclientdomicile,36%ofclientAUMareoutsidetheU.S.,andweserveclientsinmorethan120countries.ThefollowingtablespresentabreakdownofAUMbyclientdomicile,distributionchannelandassetclassasofDecember31,2018.Additionally,thefo

105、urthtablebelowillustratesthesplitofourAUMasPassiveandActive.PassiveAUMincludeindex-basedETFs,unitinvestmenttrusts(UITs),non-managementfeeearningAUM,foreignexchangeoverlaysandotherpassivemandates.ActiveAUMistotalAUMlessPassiveAUM.9TableofContents By Client Domicile($in billions)Total1-YrChangecU.S.56

106、6.3(3.3)%cCanada21.7(19.0)%cU.K.85.1(23.3)%cContinentalEurope112.5(11.5)%cAsia102.6 17.4%Total888.2 By Distribution Channel($in billions)Total1-YrChangecRetail566.7(11.0)%cInstitutional321.5 7.0%Total888.2 By Asset Class($in billions)Total1-YrChangecEquity385.2(10.7)%cFixedIncome225.1(0.3)%cBalanced

107、50.4(12.7)%cMoneyMarket91.0 15.6%cAlternatives136.5(5.3)%Total888.2 Active vs.Passive($in billions)Total1-YrChangecActive667.2(9.7)%cPassive221.0 11.1%Total888.2 10TableofContents EmployeesAsofDecember31,2018,thecompanyhad7,459employeesacrosstheglobe.Increasesin2018relateprimarilytotheacquisitionofI

108、ntelliflo,inclusionof100%ofInvescoGreatWallandgrowthinJemstep.AsofDecember31,2017and2016,wehad7,030and6,790employees,respectively.Noneofouremployeesiscoveredundercollectivebargainingagreements.CompetitionTheinvestmentmanagementbusinessishighlycompetitive,withpointsofdifferentiationincludinginvestmen

109、tperformance,theleveloffees,therangeofproductsoffered,brandrecognition,businessreputation,financialstrength,thedepthandcontinuityofrelationshipsandqualityofservice.Wecompetewithalargenumberofinvestmentmanagementfirms,commercialbanks,investmentbanks,brokerdealers,hedgefunds,insurancecompaniesandother

110、financialinstitutions.Webelievethatthequalityanddiversityofourinvestmentcapabilities,producttypesandchannelsofdistributionenableustocompeteeffectivelyintheinvestmentmanagementbusiness.Wealsobelievebeinganindependentinvestmentmanagerisacompetitiveadvantage,asourbusinessmodelavoidsconflictsthatareinhe

111、rentwithininstitutionsthatbothmanageanddistributeand/orservicethoseproducts.Lastly,webelievecontinuedexecutionagainstourstrategicobjectiveswillfurtherstrengthenourlong-termcompetitiveposition.Management ContractsWederivesubstantiallyallofourrevenuesfrominvestmentmanagementcontractswithfundsandotherc

112、lients.Feesvarywiththetypeofassetsbeingmanaged,withhigherfeesearnedonactivelymanagedequityandbalancedaccounts,alongwithrealestateandotheralternativeassetproducts,andlowerfeesearnedonfixedincome,moneymarketandstablevalueaccounts,aswellascertainETFs.Investmentmanagementcontractsaregenerallyterminableu

113、ponthirtyorfewerdaysnotice.Typically,retailinvestorsmaywithdrawtheirfundsatanytimewithoutpriornotice.Institutionalclientsmayelecttoterminatetheirrelationshipwithusorreducetheaggregateamountofassetsundermanagementwithveryshortnoticeperiods.Risk ManagementInvescoiscommittedtocontinuallystrengtheningan

114、drefiningourriskmanagementapproach.WebelieveakeyfactorinInvescosabilitytomanagethroughallmarketcyclesisourintegratedapproachtoriskmanagement.Invescosenterpriseriskmanagementapproachisembeddeditsmanagementdecision-makingprocessesacrosstheorganizationandprovidesaconsistentandmeaningfulriskdialogueup,d

115、ownandacrossthecompany.Broadly,ourapproachincludestwogovernancestructures-oneforinvestmentsandanotherforbusinessandoperationalriskswithcoordinationbetweenthetwo.InvestmentriskoversightissupportedbytheGlobalPerformanceMeasurementandRiskgroup,whichprovidesseniormanagementandtheBoardwithinsightintocore

116、investmentrisks.BusinessandoperationalriskoversightissupportedbytheCorporateRiskManagementCommitteewhichfacilitatesafocusonstrategic,operationalandotherkeybusinessrisksbothexistingandemerging,aswellasappropriateongoingmanagementandBoardoversight.Further,anetworkoffunctional,geographicandspecificrisk

117、managementcommitteesundertheguidanceandstandardsoftheCorporateRiskManagementCommitteemaintainongoingriskassessment,managementandmonitoringprocessesthatprovideabottom-upperspectiveonthespecificriskareasexistinginvariousdomainsofourbusiness.Available InformationTheSECmaintainsawebsitethatcontainsrepor

118、ts,proxyandinformationstatementsandotherinformationregardingissuerswiththeSEC,atwww.sec.gov.Wemakeavailablefreeofchargeonourwebsite,ourAnnualReportonForm10-K,QuarterlyReportsonForm10-Q,CurrentReportsonForm8-K,andamendmentstothosereportsfiledorfurnishedpursuanttoSection13(a)or15(d)oftheSecuritiesExch

119、angeActof1934,asamended,assoonasreasonablypracticableafterweelectronicallyfilesuchmaterialwith,orfurnishitto,theSEC.11TableofContents Item 1A.Risk FactorsVolatility and disruption in world capital and credit markets,as well as adverse changes in the global economy,can negatively affect Invescos reve

120、nues,operations,financial condition and liquidity.Inrecentyears,capitalandcreditmarketshaveexperiencedsubstantialvolatility.Inthisregard:Intheeventofextremecircumstances,includingeconomic,political,orbusinesscrises,suchasawidespreadsystemicfailureordisruptionsintheglobalfinancialsystemorfailuresoffi

121、rmsthathavesignificantobligationsascounterpartiesonfinancialinstruments,wemaysuffersignificantdeclinesinAUMandsevereliquidityorvaluationproblemsinmanagedinvestmentproductsinwhichclientandcompanyassetsareinvested,allofwhichwouldadverselyaffectouroperatingresults,financialcondition,liquidity,creditrat

122、ings,abilitytoaccesscapitalmarkets,andabilitytoretainandattractkeyemployees.Additionally,thesefactorscouldimpactourabilitytorealizethecarryingvalueofourgoodwillandotherintangibleassets.Illiquidityand/orvolatilityoftheglobalfixedincomeand/orequitymarketscouldnegativelyaffectourabilitytomanageclientin

123、flowsandoutflowsortotimelymeetclientredemptionrequests.Uncertaintiesregardinggeopoliticaldevelopmentscanproducevolatilityinglobalfinancialmarkets.Asanexample,theU.K.electoratevotedinJune2016toexittheEuropeanUnion(Brexit),whichresultedinmarketvolatility.AlthoughnegotiationsbetweentheUKandEUregardingB

124、rexitbeganinJune2017,itisstilluncertainwhattermsmaybeagreedtointhefinaloutcomeandforanytransitionalperiodandwhatimpactthosetermsmayhaveonglobalmarkets.ThismayimpactthelevelsandcompositionofourAUMandalsonegativelyimpactinvestorsentiment,whichcouldresultinreducedornegativeflows.Inaddition,becausetheU.

125、K.PoundSterlingisthefunctionalcurrencyforcertainofoursubsidiaries,anyweakeningoftheU.K.PoundSterlingrelativetotheU.S.Dollarcouldnegativelyimpactourreportedfinancialresults.ChangestoUnitedStatestax,tariffandimport/exportregulationsmayhaveanegativeeffectonglobaleconomicconditions,financialmarketsandou

126、rbusiness.Currently,thereissignificantuncertaintyaboutthefuturerelationshipbetweentheUnitedStatesandothercountries,includingChina,withrespecttotradepolicies,treaties,taxes,governmentregulationsandtariffs.Itisunclearwhatchangesmaybeconsideredorimplementedandwhattheresponsewillbetoanysuchchangesbyothe

127、rgovernmentsofsuchaffectedcountries.Thesedevelopments,ortheperceptionthatanyofthemcouldoccur,mayhaveamaterialadverseeffectonglobaleconomicconditionsandthestabilityofglobalfinancialmarkets,andmaysignificantlyreduceglobaltradeand,inparticular,tradebetweenthesenationsandtheUnitedStates.Givenourstrongpo

128、sitioninAsiaPacific,wecouldbemoreadverselyaffectedthanothersbysuchmarketuncertainties.IntheU.S.,regulationsrequiringavariable(“floating”)netassetvalue(NAV)forinstitutionalprimeandtax-freemoneymarketfundsbecameeffectiveinOctober2016.Thosesameregulationsalsoprovideforthepotentialimpositionoftheassessm

129、entoffeesinconnectionwithredemptionsand/orgatesthatpostponethetimeinwhichredemptionsmustbeprocessedintheeventthosefundsweeklyliquidassetsfallbelowcertainspecifiedthresholds.Ourgovernmentmoneymarketfundsandretailprimeandtax-freemoneymarketfundscontinuetoofferastableNAVof$1.00pershareandarenotrequired

130、toimposefeesandgates;however,wedonotguaranteesuchNAVlevel.Marketconditionscouldleadtosevereliquidityissuesinmoneymarketproducts,whichcouldleadtotheimpositionoffeesorgateswithrespecttoinstitutionalprimeandtax-freemoneymarketfundsandaneffectontheNAVsofgovernmentandretailprimeandtax-freemoneymarketfund

131、s.Ifourinstitutionalprimeortax-freemoneymarketfundsweretoimposeredemptionfeesorgatesdelayingthepaymentofredemptionproceeds,ortheNAVofoneofourgovernmentorretailprimeortax-freemoneymarketfundsweretodeclinebelow$1.00pershare,suchfundscouldexperiencesignificantredemptionsinAUM,lossofshareholderconfidenc

132、eandreputationalharm.Our revenues and profitability would be adversely affected by any reduction in AUM as a result of either a decline in market value of such assets or netoutflows,which would reduce the investment management fees we earn.Wederivesubstantiallyallofourrevenuesfrominvestmentmanagemen

133、tcontractswithclients.Underthesecontracts,theinvestmentmanagementfeespaidtousaretypicallybasedonthemarketvalueofAUM.AUMmaydeclineforvariousreasons.Foranyperiodinwhichrevenuesdecline,ourincomeandoperatingmarginlikelywoulddeclinebyagreaterproportionbecauseamajorityofourexpensesremainfixed.Factorsthatc

134、oulddecreaseAUM(andthereforerevenues)includethefollowing:Declines in the market value of AUM in client portfolios.ThesecouldbecausedbypricedeclinesinthesecuritiesmarketsgenerallyorbypricedeclinesinthemarketsegmentsinwhichourAUMareconcentrated.Approximately43%ofourtotalAUMwereinvestedintheequityasset

135、classandapproximately57%wereinvestedinthefixedincomeasset12TableofContents classandotherassetclassesatDecember31,2018.OurAUMasofJanuary31,2019were$930.6billion.Wecannotpredictwhethervolatilityinthemarketswillresultinsubstantialorsustaineddeclinesinthesecuritiesmarketsgenerallyorresultinpricedeclines

136、inmarketsegmentsinwhichourAUMareconcentrated.Anyoftheforegoingcouldnegativelyimpactourrevenues,incomeandoperatingmargin.Redemptions and other withdrawals from,or shifting among,client portfolios.Thesecouldbecausedbyinvestors(inresponsetoadversemarketconditionsorpursuitofotherinvestmentopportunities)

137、reducingtheirinvestmentsinclientportfoliosingeneralorinthemarketsegmentsinwhichInvescofocuses;investorstakingprofitsfromtheirinvestments;poorinvestmentperformance(relativeorabsolute)oftheclientportfoliosmanagedbyInvesco;andportfolioriskcharacteristics,whichcouldcauseinvestorstomoveassetstootherinves

138、tmentmanagers.Poorperformancerelativetootherinvestmentmanagementfirmstendstoresultindecreasedsalesandincreasedredemptionswithcorrespondingdecreasesinourrevenues.Failureofourclientportfoliostoperformwellcould,therefore,haveamaterialadverseeffectonus.Furthermore,thefeesweearnvarywiththetypesofassetsbe

139、ingmanaged,withhigherfeesearnedonactivelymanagedequityandbalancedaccounts,alongwithrealestateandotheralternativeassetproducts,andlowerfeesearnedonfixedincome,stablereturnaccounts,andcertainETFs.Ourrevenuesmaydeclineifclientscontinuetoshifttheirinvestmentstolowerfeeaccounts.Inaddition,thelossofkeyper

140、sonnelorsignificantinvestmentmanagementprofessionalscouldreducetheattractivenessofourproductstocurrentandpotentialclientsandadverselyaffectourrevenuesandprofitability.Investments in international markets.Investmentproductsthatwemanagemayhavesignificantinvestmentsininternationalmarketsthataresubjectt

141、osignificantrisksoflossfrompolitical,economic,diplomaticdevelopments,currencyfluctuations,socialinstability,changesingovernmentalpolicies,expropriation,nationalizationandassetconfiscation.Internationaltradingmarkets,particularlyemergingmarkets,areoftensmaller,lessliquid,lessregulatedandsignificantly

142、morevolatilethanthoseinthedevelopedworld.Competitive pressures may force us to reduce the fees we charge to clients,increase commissions paid to our financial intermediaries or provide moresupport to those intermediaries or could limit or reduce sales of our products,all of which could reduce our pr

143、ofitability.Theinvestmentmanagementbusinessishighlycompetitive,andwecompetebasedonavarietyoffactors,includinginvestmentperformance,therangeofproductsoffered,brandrecognition,businessreputation,financialstrength,stabilityandcontinuityofclientandfinancialintermediaryrelationships,qualityofservice,leve

144、loffeeschargedforservicesandthelevelofcompensationpaidanddistributionsupportofferedtofinancialintermediaries.Wecontinuetofacemarketpressuresregardingfeelevelsinmanyproducts.Investorsremainattractedtolowerfeepassiveproducts,whichhavegainedandmaycontinuetogainshareattheexpenseofactiveproducts.Wefacest

145、rongcompetitionineverymarketinwhichweoperate.Ourcompetitorsincludealargenumberofinvestmentmanagementfirms,commercialbanks,investmentbanks,broker-dealers,hedgefunds,insurancecompaniesandotherfinancialinstitutions.Someoftheseinstitutionshavegreatercapitalandotherresources,andoffermorecomprehensiveline

146、sofproductsandservices,thanwedo.Ourcompetitorsseektoexpandtheirmarketshareinmanyoftheproductsandservicesweoffer.Ifthesecompetitorsaresuccessful,ourrevenuesandprofitabilitycouldbeadverselyaffected.Inaddition,therearerelativelyfewbarrierstoentrybynewinvestmentmanagementfirms,andthesuccessfuleffortsofn

147、ewentrantsaroundtheworldhavealsoresultedinincreasedcompetition.Inrecentyearstherehavebeenseveralinstancesofindustryconsolidation,bothintheareaofdistributorsandmanufacturersofinvestmentproducts.Furtherconsolidationmayoccurintheseareasinthefuture.Theincreasingsizeandmarketinfluenceofcertaindistributor

148、sofourproductsandofcertaindirectcompetitorsmayhaveanegativeimpactonourabilitytocompeteatthesamelevelsofprofitabilityinthefuture.We may not adjust our expenses quickly enough to match significant deterioration in global financial markets.Ifweareunabletoeffectappropriateexpensereductionsinatimelymanne

149、rinresponsetodeclinesinourrevenues,orifweareotherwiseunabletoadapttorapidchangesintheglobalmarketplace,ourprofitability,financialconditionandresultsofoperationswouldbeadverselyaffected.Our revenues and profitability from money market and other fixed income assets may be harmed by interest rate,liqui

150、dity and credit volatility.13TableofContents Certaininstitutionalinvestorsusingmoneymarketproductsandothershort-termdurationfixedincomeproductsforcashmanagementpurposesmayshifttheseinvestmentstodirectinvestmentsincomparableinstrumentsinordertorealizehigheryieldsthanthoseavailableinmoneymarketandothe

151、rfundproductsholdingloweryieldinginstruments.Theseredemptionswouldreducemanagedassets,therebyreducingourrevenues.Inaddition,risinginterestrateswilltendtoreducethemarketvalueoffixedincomeinvestmentsandfixedincomederivativesheldinvariousinvestmentportfoliosandotherproducts.Thus,increasesininterestrate

152、scouldhaveanadverseeffectonourrevenuesfromcertainfixedincomeproducts.Ifsecuritieswithinamoneymarketportfoliodefaultorinvestorredemptionsforcetheportfoliotorealizelosses,therecouldbenegativepressureonitsNAV.Althoughmoneymarketinvestmentsarenotguaranteedinstruments,thecompanymightdecide,undersuchascen

153、ario,thatitisinitsbestinteresttoprovidesupportintheformofasupportagreement,capitalinfusion,orothermethodstohelpstabilizeadecliningNAV.Someofthesemethodscouldhaveanadverseimpactonourprofitability.Additionally,wehaveinvestmentsinfixedincomeassets,includingcollateralizedloanobligationsandseedmoneyinfix

154、edincomefunds,thevaluationofwhichcouldchangewithchangesininterestanddefaultrates.Themannerinwhichinterestratesarecalculatedcouldalsoimpactourclientportfolios.Forexample,LIBOR,aswellasotherinterestrate,equity,foreignexchangerateandothertypesofindiceswhicharedeemedtobebenchmarks,arethesubjectofongoing

155、international,nationalandotherregulatoryguidanceandproposalsforreform.Someofthesereformsarealreadyeffectivewhileothersarestilltobeimplemented.ThesereformsmaycauseLIBORtoperformdifferentlythaninthepast,ortodisappearentirely,orhaveotherconsequenceswhichcannotbefullyanticipated.Changesinthemethodpursua

156、nttowhichLIBORisdeterminedorthediscontinuanceofLIBORmayadverselyaffecttheamountofinterestpayableorinterestreceivableoncertainportfolioinvestments.Thesechangesmayalsoimpactthemarketliquidityandmarketvalueoftheseportfolioinvestments.We may engage in strategic transactions that could create risks.Wereg

157、ularlyreview,andfromtime-to-timehavediscussionswithandengagein,potentialstrategictransactions,includingpotentialacquisitions,dispositions,consolidations,jointventuresorsimilartransactions,someofwhichmaybematerial.Therecanbenoassurancethatwewillfindsuitablecandidatesforstrategictransactionsatacceptab

158、leprices,havesufficientcapitalresourcestopursuesuchtransactions,besuccessfulinnegotiatingtherequiredagreements,orsuccessfullyclosetransactionsaftersigningsuchagreements.Acquisitionsalsoposetheriskthatanybusinessweacquiremaylosecustomersoremployeesorcouldunderperformrelativetoexpectations.Wecouldalso

159、experiencefinancialorothersetbacksifpendingtransactionsencounterunanticipatedproblems,includingproblemsrelatedtoclosingorintegration.Followingthecompletionofanacquisition,wemayhavetorelyonthesellertoprovideadministrativeandothersupport,includingfinancialreportingandinternalcontrols,totheacquiredbusi

160、nessforaperiodoftime.Therecanbenoassurancethatsuchsellerswilldosoinamannerthatisacceptabletous.Combining OppenheimerFunds may be more difficult,costly or time consuming than expected and the anticipated benefits of the acquisition may not berealized.InOctober2018,Invescoenteredintoadefinitiveagreeme

161、nttoacquireOppenheimerFundsfromMassMutual.InvescoandOppenheimerFundshaveoperatedand,untilthecompletionoftheacquisition,willcontinuetooperate,independently.Itispossiblethattheintegrationprocesscouldresultinthelossofkeyemployees,thedisruptionofeithercompanysongoingbusinesses,orinconsistenciesinstandar

162、ds,controls,proceduresandpoliciesthatadverselyaffectthecombinedcompanysabilitytomaintainrelationshipswithclients,distributors,employeesandothers,ortoachievetheanticipatedbenefitsoftheacquisition.Ifweexperiencedifficultieswiththeintegrationprocessandattendantsystemsconversions,includingduetothefailur

163、eofcriticalthird-partyserviceproviders,wemayadverselyimpactclientordistributionrelationships.Thiscouldresultinthelossofassetsundermanagement,orpreventordelayourabilitytoachievetheanticipatedbenefitsoftheacquisition.Integrationeffortsbetweenthetwocompanieswillalsodivertsignificantmanagementattentiona

164、ndresources.Theseintegrationmatterscouldhaveanadverseeffectoneithercompanyduringthistransitionperiodandonthecombinedcompanyforanundeterminedperiodaftercompletionoftheacquisition.Invesco and OppenheimerFunds will be subject to business uncertainties and contractual restrictions while the acquisition

165、is pending.UncertaintyabouttheeffectoftheacquisitiononemployeesandclientsmayhaveanadverseeffectonInvescoandOppenheimerFunds.Theseuncertaintiesmayimpairtheabilityofbothofustoattract,retain,andmotivatekeypersonnel14TableofContents untiltheacquisitioniscompleted,andcouldcauseclientsandothersthatdealwit

166、hInvescoorOppenheimerFundstoseektochangeexistingbusinessrelationships.The OppenheimerFunds business may lose clients as a result of the acquisition.UndertheInvestmentCompanyActof1940,eachoftheinvestmentadvisoryagreementsforOppenheimerFunds-advisedU.S.mutualfundsthatareregisteredas“investmentcompanie

167、s”undertheInvestmentCompanyActwillautomaticallyterminateasaresultoftheacquisition,andtheinvestmentadvisoryagreementsofotherOppenheimerFundsclientsmayalsoterminateifthepartiesfailtoobtaintheapprovalofsuchotherclientsforthecontinuationofsuchagreementsfollowingtheacquisition.Underthemergeragreement,the

168、partiesagreedtoseektheconsentofotherclientstothecontinuationoftheiradvisoryagreementsfollowingtheacquisition.Itisaconditiontocompletingtheacquisitionthatthepartiesobtainotherclientapprovalsreflecting,asofshortlypriortoclosing,annualizedrevenuesofatleast75%oftheamountscalculatedbeforethesigningofthem

169、ergeragreement(withallrevenuecalculationsadjustedtoeliminatetheimpactofmarketandcurrencymovements),andthepurchasepriceissubjecttoadjustmentiftheshortfallexceedsacertainthreshold.Noassurancecanbegiventhatwewillbeabletoobtainthenecessaryapprovalsandconsents,andthedecreaseinrevenuethatcouldresultfromaf

170、ailuretoobtainsuchapprovals,eveniftheclosingconditionissatisfiedandthepurchasepriceimpacttakenintoaccount,couldhaveanadverseeffectonourbusinessandtheanticipatedbenefitsoftheacquisition.The merger agreement may be terminated in accordance with its terms and the acquisition may not be completed.Themer

171、geragreementissubjecttoanumberofconditionswhichmustbefulfilledinordertocompletetheacquisition.Thoseconditionsinclude,amongothers(1)certainregulatoryapprovals,(2)absenceofinjunctionsprohibitingthecompletionoftheacquisition,(3)approvalfromtheNewYorkStockExchangeforthelistingofourcommonsharestobeissued

172、aspartoftheacquisitionconsideration,(4)adoptionbyusofacertificateofdesignationforthepreferredsharestobeissuedaspartoftheacquisitionconsideration,(5)subjecttocertainmaterialitythresholds,theaccuracyoftherepresentationsandwarrantiesmadebytheotherparty,(6)materialcompliancebysuchotherpartywithitsrespec

173、tiveobligationsunderthemergeragreementand(7)therevenuerun-rateasofshortlypriortotheclosingoftheacquisitionbeingatleastequalto75%oftherevenuerun-rateasofshortlypriortothesigningofthemergeragreement.Additionally,MassMutualsobligationtocompletethetransactionissubjecttothereceiptofafavorableopinionfromi

174、tscounselregardingcertaintaxmatters.Theseconditionstotheclosingoftheacquisitionmaynotbefulfilledinatimelymanneroratall,and,accordingly,theacquisitionmaynotbecompleted.Inaddition,thepartiescanmutuallydecidetoterminatethemergeragreementatanytime,andeachofusmayelecttoterminatethemergeragreementincertai

175、nothercircumstances.We will incur transaction and integration costs in connection with the acquisition of OppenheimerFunds.Weexpecttoincursignificant,non-recurringcostsinconnectionwiththeacquisitionofOppenheimerFunds.Inaddition,wewillincurintegrationcostsfollowingthecompletionoftheacquisitionasweint

176、egratetheOppenheimerFundsbusinessandsystemswithourownbusinessesandsystems.Therecanbenoassurancesthattheexpectedbenefitsandefficienciesrelatedtotheintegrationofthebusinesswillberealizedtooffsetthesetransactionandintegrationcostsovertime.Seetheriskfactorentitled“CombiningOppenheimerFundsmaybemorediffi

177、cult,costlyortimeconsumingthanexpectedandtheanticipatedbenefitsandcostsavingsoftheacquisitionmaynotberealized”above.Wewillalsoincursignificantlegal,accounting,andotheradvisorfees,includinginconnectionwithoureffortstoseektheapprovaloftheOppenheimerFundsclientstothetransaction.Someofthesecostsarepayab

178、leregardlessofwhethertheacquisitioniscompleted.In connection with the acquisition of OppenheimerFunds,we will issue perpetual preferred stock having a value of approximately$4 billion,which couldadversely affect our ability to raise additional capital and may limit our ability to fund other prioriti

179、es.Inconnectionwiththeacquisition,Invescowillissueapproximately$4billionof5.9%fixedrateperpetualpreferredstocktothecurrentshareholdersofOppenheimerFunds.Thisissuancemaylimitourabilitytoobtainadditionalfinancingforworkingcapital,capitalexpenditures,debtservicerequirements,acquisitionsandgeneralcorpor

180、ateorotherpurposes;mayrestrictourabilitytopaydividendstoholdersofcommonsharesincertaincircumstances;mayincreaseourvulnerabilitytogeneraleconomicandindustryconditions;andwillrequireasignificantportionofcashflowfromoperationstomakedistributions.In connection with the acquisition of OppenheimerFunds,we

181、 will issue approximately 81.9 million common shares,which could adversely impact ourtrading price upon resale of those shares.Wewillissueapproximately81.9millioncommonsharesinconnectionwiththeacquisition,mostofwhichwillbeheldbyMassMutual.ThesharesheldbyMassMutualwillbesubjecttoanagreementnottosellt

182、hosesharesforaperiod15TableofContents oftwoyearsfollowingcompletionoftheacquisition,subjecttoearlytermination,aswellastocertainlimitationsonresales.However,MassMutualmayinthefuturesellthesesharesintheopenmarketorthroughsecondaryofferings.IfMassMutualweretosellitsfutureequitystakeinInvesco,orexpressa

183、nintentiontosellthestake,thatactioncouldhaveasignificantimpactonourcommonsharetradingprice.We depend on information technology,and any failures of or damage to,attack on or unauthorized access to our information technology systems orfacilities,or those of third parties with which we do business,incl

184、uding as a result of cyber-attacks,could result in significant limits on our ability to conductour operations and activities,costs and reputational damage.Wearehighlydependentupontheuseofvariousproprietaryandthird-partyinformationandsecuritytechnology,softwareapplicationsandothertechnologysystemstoo

185、perateourbusiness.Wearealsodependentontheeffectivenessofourinformationandcybersecurityinfrastructure,policies,proceduresandcapabilitiestoprotectourcomputerandtelecommunicationssystemsandthedatathatresideonoraretransmittedthroughthem.Weuseourtechnologyto,amongotherthings,manageandtradeportfolioinvest

186、ments,supportourotheroperations,obtainsecuritiespricinginformation,processclienttransactions,protecttheprivacyofclients,employeesandbusinesspartnersdataandprovidereportsandothercustomerservicestotheclientsofthefundswemanage.Anyinaccuracies,delays,systemsfailuresorsecuritybreachesintheseandotherproce

187、ssescoulddisruptourbusinessoperations,subjectustoclient,employeeorbusinesspartnerdissatisfactionandlossesand/orsubjectustoreputationalharm.Ourcomputer,communications,dataprocessing,networks,backup,businesscontinuityorotheroperating,informationortechnologysystemsandfacilities,includingthosethatweouts

188、ourcetootherproviders,mayfailtooperateproperlyorbecomedisabled,overloadedordamagedasaresultofanumberoffactors,includingeventsthatarewhollyorpartiallybeyondourcontrol.Further,third-partyserviceprovidersmayhavelimitedindemnificationobligationstousregardingcyber-incidents.Inrecentyears,severalfinancial

189、servicesfirmssufferedcyber-attackslaunchedbothdomesticallyandfromabroad,resultinginthedisruptionofservicestoclients,lossormisappropriationofconfidentialdataandreputationalharm.Cyber-securityincidentsandcyber-attackshavebeenoccurringgloballyatamorefrequentandseverelevel.Ourstatusasaglobalfinancialins

190、titutionandthenatureofourclientbasemayenhancetheriskthatwearetargetedbysuchcyber-threats.Althoughwetakeprotectivemeasures,includingmeasurestoeffectivelysecureinformationthroughsystemsecuritytechnology,andcontinuallymonitoranddevelopoursystemstoprotectourtechnologyinfrastructureanddatafrommisappropri

191、ationorcorruption,ourtechnologysystemsmaystillbevulnerabletounauthorizedaccess,computervirusesorothereventsthathaveasecurityimpact,suchasanexternalhackerattackbyoneormorecybercriminalsoranauthorizedemployeeorvendorcausingustoreleaseconfidentialinformationinadvertentlyorthroughmalfeasance,orlosetempo

192、rarilyorpermanentlydataorapplicationsorsystems,whichcouldmateriallyharmouroperationsandreputation.Thethirdpartieswithwhichwedobusinessorwhichfacilitateourbusinessactivities,includingfinancialintermediariesandtechnologyinfrastructureandserviceproviders,arealsosusceptibletotheforegoingrisks(includingr

193、egardingthethirdpartieswithwhichtheyaresimilarlyinterconnectedoronwhichtheyotherwiserely),andourortheirbusinessoperationsandactivitiesmaythereforebeadverselyaffected,perhapsmaterially,byfailures,terminations,errorsormalfeasanceby,orattacksorconstraintson,oneormorefinancial,technologyorinfrastructure

194、institutionsorintermediarieswithwhomweortheyareinterconnectedorconductbusiness.Breachofourtechnologysystemscoulddamageourreputationandcouldresultintheunauthorizeddisclosureormodificationorlossofsensitiveorconfidentialinformation(includingclientdata);unauthorizeddisclosuremodificationorlossofpropriet

195、aryinformationrelatingtoourbusiness;inabilitytoprocessclientorcompanytransactionsandprocesses;breachandterminationofclientcontracts;liabilityforstolenassets,informationoridentity;remediationcoststorepairdamagecausedbythebreach,includingdamagetosystemsandrecoveryoflostdata;additionalsecuritycoststomi

196、tigateagainstfutureincidents;regulatoryactions(includingfinesandpenalties,whichcouldbematerial)andlitigationcostsresultingfromtheincident.Suchconsequencescouldresultinmaterialfinanciallossandhaveanegativeeffectonourrevenuesandprofitability.Our investment management professionals and other key employ

197、ees are a vital part of our ability to attract and retain clients,and the loss of key individualsor a significant portion of those professionals could result in a reduction of our revenues and profitability.Retaininghighlyskilledtechnicalandmanagementpersonnelisimportanttoourabilitytoattractandretai

198、nourclients.Themarketforinvestmentmanagementprofessionalsiscompetitiveandhasbecomemoresoinperiodsofgrowthoftheinvestmentmanagementindustry.Themarketforinvestmentprofessionalsandotherkeypersonnelisattimes16TableofContents characterizedbythemovementoftheseprofessionalsamongdifferentfirms.Ourpolicyhasb

199、eentoprovideourinvestmentmanagementprofessionalsandotherkeypersonnelwithasupportiveprofessionalworkingenvironmentandcompensationandbenefits(includingequityandotherformsofdeferredcompensation)thatwebelievearecompetitivewithotherleadinginvestmentmanagementfirms.However,wemaynotbesuccessfulinretainingo

200、urkeypersonnel,andthelossofsignificantinvestmentprofessionalsorotherkeypersonnelcouldreducetheattractivenessofourproductstopotentialandcurrentclientsandcould,therefore,adverselyaffectourrevenuesandprofitability.Changes in the distribution channels on which we depend could reduce our net revenues and

201、 hinder our growth.Wesellsubstantiallyallofourretailinvestmentproductsthroughavarietyofthirdpartyfinancialintermediaries,includingmajorwirehouses,fundsupermarkets,regionalbroker-dealers,insurancecompanies,banksandfinancialplannersinNorthAmerica,andindependentbrokersandfinancialadvisors,banksandsuper

202、marketplatformsinEuropeandAsia.Nosingleoneoftheseintermediariesismaterialtoourbusiness.Increasingcompetitionforthesedistributionchannelscouldneverthelesscauseourdistributioncoststorise,whichwouldlowerournetrevenues.Followingthefinancialcrisis,therehasbeenconsolidationofbanksandbroker-dealers,particu

203、larlyintheU.S.,andalimitedamountofmigrationofbrokersandfinancialadvisorsawayfrommajorbankstoindependentfirmsfocusedlargelyonprovidingadvice.Ifthesechangescontinue,ourdistributioncostscouldincreaseasapercentageofourrevenuesgenerated.Additionally,particularlyoutsideoftheU.S.,certainofthethirdpartyinte

204、rmediariesuponwhomwerelytodistributeourinvestmentproductsalsoselltheirowncompetingproprietaryfundsandinvestmentproducts,whichcouldlimitthedistributionofourproducts.Investors,particularlyintheinstitutionalmarket,relyonexternalconsultantsandotherthirdpartiesforadviceonthechoiceofinvestmentmanager.Thes

205、econsultantsandthirdpartiestendtoexertasignificantdegreeofinfluenceovertheirclientschoices,andtheymayfavoracompetitorofInvescoasbettermeetingtheirparticularclientsneeds.Thereisnoassurancethatourinvestmentproductswillbeamongtheirrecommendedchoicesinthefuture.Similarly,particularlyintheUnitedStates,ce

206、rtaindistributorshavesubstantiallyreducedthenumberofinvestmentfundstheymakeavailabletotheircustomers.Ifamaterialportionofourdistributorsweretosubstantiallynarrowtheirproductofferings,itcouldhaveasignificantadverseeffectonourrevenuesandprofitability.Anyfailuretomaintainstrongbusinessrelationshipswith

207、thesedistributionsourcesandtheconsultantcommunitywouldimpairourabilitytosellourproducts,whichinturncouldhaveanegativeeffectonourrevenuesandprofitability.We may be unable to develop new products and services and the development of new products and services may expose us to additional costs or operati

208、onalrisk.Ourfinancialperformancedepends,inpart,onthecompanysabilitytodevelop,marketandmanagenewinvestmentproductsandservices.Thedevelopmentandintroductionofnewproductsandservicesrequirescontinuedinnovativeeffortsonourpartandmayrequiresignificanttimeandresourcesaswellasongoingsupportandinvestment.Sub

209、stantialriskanduncertaintiesareassociatedwiththeintroductionofnewproductsandservices,includingtheimplementationofnewandappropriateoperationalcontrolsandprocedures,shiftingclientandmarketpreferences,theintroductionofcompetingproductsorservicesandcompliancewithregulatoryrequirements.Newproductsoftenmu

210、stbeinthemarketplaceforthreeormoreyearsinordertogeneratetrackrecordsrequiredtoattractsignificantAUMinflows.AfailuretocontinuetoinnovatetointroducesuccessfulnewproductsandservicesortomanageeffectivelytherisksassociatedwithsuchproductsandservicesmayimpactourmarketsharerelevanceandmaycauseourAUM,revenu

211、eandearningstodecline.Our financial condition and liquidity would be adversely affected by losses on our seed capital and co-investments.Thecompanyhasinvestmentsinmanagedinvestmentproductsthatinvestinavarietyofassetclasses,including,butnotlimitedtoequities,fixedincomeproducts,commodities,derivatives

212、,andsimilarfinancialinstruments,privateequityandrealestate.Investmentsintheseproductsaregenerallymadetoestablishatrackrecord,meetpurchasesizerequirementsfortradingblocks,ordemonstrateeconomicalignmentwithotherinvestorsinourfunds.Adversemarketconditionsmayresultintheneedtowritedownthevalueoftheseseed

213、capitalandco-investments.Areductioninthevalueoftheseinvestmentsmayadverselyaffectourresultsofoperationsorliquidity.AsofDecember31,2018,thecompanyhadapproximately$983.1millioninseedcapitalandco-investments,includingdirectinvestmentsinconsolidatedinvestmentproducts(CIP).Failure to comply with client c

214、ontractual requirements and/or investment guidelines could result in damage awards against us and loss of revenues due toclient terminations.Manyoftheinvestmentmanagementagreementsunderwhichwemanageassetsorprovideproductsorservicesspecifyinvestmentguidelinesorrequirementsthatwearerequiredtoobservein

215、theprovisionofourservices.Lawsand17TableofContents regulationsimposesimilarrequirementsforcertainclientportfolios(suchasregisteredfunds).Afailuretocomplywiththeseguidelinesorrequirementscouldresultindamagetoourreputationorinourclientsseekingtorecoverlosses,withdrawingtheirassetsorterminatingtheircon

216、tracts.Regulatorslikewisemaycommenceenforcementactionsforviolationsofsuchrequirements.Anysucheffectscouldcauseourrevenuesandprofitabilitytodecline.Wemaintainvariouscomplianceproceduresandothercontrolstoprevent,detectandcorrectsucherrors.Whenanerrorisdetected,apaymentwilltypicallybemadeintotheapplica

217、bleclientaccounttocorrectit.Significanterrorsforwhichweareresponsiblecouldimpactourresultsofoperations,financialconditionorliquidity.Our investment advisory agreements are subject to termination or non-renewal,and our fund and other investors may withdraw their assets at any time.Substantiallyallofo

218、urrevenuesarederivedfrominvestmentmanagementagreements.Investmentmanagementagreementsaregenerallyterminableupon30orfewerdaysnotice.AgreementswithU.S.registeredfundsmaybeterminatedwithnotice,orterminatedintheeventofan“assignment”(asdefinedintheInvestmentCompanyActof1940,asamended),andmustberenewedann

219、uallybythedisinterestedmembersofeachfundsBoardofTrusteesorDirectors,asrequiredbylaw.Inaddition,theBoardsofTrusteesorDirectorsofcertainotherfundaccountsgenerallymayterminatetheseinvestmentmanagementagreementsuponwrittennoticeforanyreason.Open-endregisteredfundandunittrustinvestorsmaygenerallywithdraw

220、theirfundsatanytimewithoutpriornotice.InstitutionalclientsmayelecttoterminatetheirrelationshipswithusorreducetheaggregateamountofAUM,generallyonshortnotice.Anyterminationoforfailuretorenewasignificantnumberoftheseagreements,oranyotherlossofasignificantnumberofourclientsorAUM,wouldadverselyaffectourr

221、evenuesandprofitability.If our reputation is harmed,we could suffer losses in our business,revenues and net income.Ourbusinessdependsonearningandmaintainingthetrustandconfidenceofclients,regulatorsandothermarketparticipants,andourgoodreputationiscriticaltoourbusiness.Ourreputationisvulnerabletomanyt

222、hreatsthatcanbedifficultorimpossibletocontrol,andcostlyorimpossibletoremediate.Regulatoryinquiries,investigationsorfindingsofwrongdoing,intentionalorunintentionalmisrepresentationofourproductsandservicesinadvertisingmaterials,publicrelationsinformation,socialmediaorotherexternalcommunications,operat

223、ionalfailures(includingcyberbreaches),employeedishonestyorothermisconductandrumors,amongotherthings,cansubstantiallydamageourreputation,eveniftheyarebaselessoreventuallysatisfactorilyaddressed.Ourbusinessalsorequiresuscontinuouslytomanageactualandpotentialconflictsofinterest,includingsituationswhere

224、ourservicestoaparticularclientconflict,orareperceivedtoconflict,withtheinterestsofotherclientsorthoseofInvesco.Thewillingnessofclientstoenterintotransactionsinwhichsuchaconflictmightarisemaybeaffectedifwefail-orappeartofail-todealappropriatelywithconflictsofinterest.Inaddition,potentialorperceivedco

225、nflictscouldgiverisetolitigationorregulatoryenforcementactions.Wehaveproceduresandcontrolsthataredesignedtoaddressandmanagetheserisks,butthistaskcanbecomplexanddifficult,andifourproceduresandcontrolsfail,ourreputationcouldbedamaged.Anydamagetoourreputationcouldimpedeourabilitytoattractandretainclien

226、tsandkeypersonnel,andleadtoareductionintheamountofourAUM,anyofwhichcouldhaveamaterialadverseeffectonourresultsofoperations,financialconditionorliquidity.The failure or negative performance of products offered by competitors may have a negative impact on similar Invesco products irrespective of ourpe

227、rformance.ManycompetitorsoffersimilarproductstothoseofferedbyusandthefailureornegativeperformanceofcompetitorsproductscouldleadtoalossofconfidenceinsimilarInvescoproducts,irrespectiveoftheperformanceofsuchproducts.Anylossofconfidenceinaproducttypecouldleadtowithdrawals,redemptionsandliquidityissuesi

228、nsuchproducts,whichcouldhaveamaterialadverseeffectonourresultsofoperations,financialconditionorliquidity.18TableofContents The soundness of other financial institutions could adversely affect us.Financialservicesinstitutionsareinterrelatedasaresultoftrading,clearing,counterparty,orotherrelationships

229、.We,andtheclientportfoliosthatwemanage,haveexposuretomanydifferentindustriesandcounterparties,androutinelyexecutetransactionswithcounterpartiesinthefinancialservicesindustry,includingbrokersanddealers,commercialbanks,investmentbanks,clearingorganizations,hedgefundsandotherinstitutions.Manyofthesetra

230、nsactionsexposeusorsuchclientportfoliostocreditriskintheeventofdefaultofitscounterparty.Whileweregularlyconductassessmentsofsuchriskposedbycounterparties,theriskofnon-performancebysuchpartiesissubjecttosuddenswingsinthefinancialandcreditmarkets.Our ability to maintain our credit ratings and to acces

231、s the capital markets in a timely manner should we seek to do so depends on a number of factors.Ouraccesstothecapitalmarketsdependssignificantlyonourcreditratings.WehavereceivedcreditratingsofA2/Stable,BBB+/StableandA-/PositivefromMoodysInvestorServices(Moodys),Standard&PoorsRatingsService(S&P),andF

232、itchRatings(Fitch),respectively,asofthedatehereof.Webelievethatratingagencyconcernsincludebutarenotlimitedtothefactthatourrevenuesareexposedtoequitymarketvolatilityandthepotentialimpactfromregulatorychangestotheindustry.Additionally,theratingagenciescoulddecidetodowngradetheentireinvestmentmanagemen

233、tindustry,basedontheirperspectiveoffuturegrowthandsolvency.Materialdeteriorationofthesefactors,andothersdefinedbyeachratingagency,couldresultindowngradestoourcreditratings,therebylimitingourabilitytoaccessadditionalfinancing.Managementbelievesthatsolidinvestmentgraderatingsareanimportantfactorinwinn

234、ingandmaintaininginstitutionalbusinessandstrivestomanagethecompanytomaintainsuchratings.Ourcreditfacilityborrowingratesaretiedtoourcreditratings.Areductioninourlong-termcreditratingscouldincreaseourborrowingcosts,couldlimitouraccesstothecapitalmarketsandmayresultinoutflowstherebyreducingAUMandrevenu

235、es.Volatilityinglobalfinancemarketsmayalsoaffectourabilitytoaccessthecapitalmarketsshouldweseektodoso.Ifweareunabletoaccesscapitalmarketsinatimelymanner,ourbusinesscouldbeadverselyaffected.Our indebtedness could adversely affect our financial position or results of operations.AsofDecember31,2018,weh

236、adoutstandingtotaldebtof$2,408.8million,excludingdebtofCIP,andtotalequityattributabletoInvescoLtd.of$8,578.8million.Theamountofindebtednesswecarrycouldlimitourabilitytoobtainadditionalfinancingforworkingcapital,capitalexpenditures,acquisitions,debtservicerequirementsorotherpurposes,increaseourvulner

237、abilitytoadverseeconomicandindustryconditions,limitourflexibilityinplanningfor,orreactingto,changesinourbusinessorindustryandplaceusatadisadvantageinrelationtoourcompetitors.Anyoralloftheabovefactorscouldmateriallyadverselyaffectourfinancialpositionorresultsofoperations.Our credit facility imposes r

238、estrictions on our ability to conduct business and,if amounts borrowed under it were subject to accelerated repayment,we mightnot have sufficient assets or liquidity to repay such amounts in full.Ourcreditfacilityrequiresustomaintainspecifiedfinancialratios,includingmaximumdebt-to-earningsandminimum

239、interestcoverageratios.Thecreditfacilityalsocontainscustomaryaffirmativeoperatingcovenantsandnegativecovenantsthat,amongotherthings,restrictcertainofoursubsidiariesabilitytoincurdebtandrestrictourabilitytotransferassets,merge,makeloansandotherinvestmentsandcreateliens.Thebreachofanycovenant(eitherdu

240、etoouractionsorduetoasignificantandprolongedmarket-drivendeclineinouroperatingresults)wouldresultinadefaultunderthecreditfacility.Intheeventofanysuchdefault,lendersthatarepartytothecreditfacilitycouldrefusetomakefurtherextensionsofcredittousandrequireallamountsborrowedunderthecreditfacility,together

241、withaccruedinterestandotherfees,tobeimmediatelydueandpayable.Ifanyindebtednessunderthecreditfacilityweresubjecttoacceleratedrepaymentandifwehadatthattimeasignificantamountofoutstandingdebtunderthecreditfacility,wemightnothavesufficientliquidassetstorepaysuchindebtednessinfull.Performance fees may in

242、crease revenue and earnings volatility.Aportionofthecompanysrevenuesisderivedfromperformancefeesoninvestmentadvisoryassignments.Performancefeesrepresented$56.9million,or1.1%,oftotaloperatingrevenuesfortheyearendedDecember31,2018.Inmostcases,performancefeesarebasedonrelativeorabsoluteinvestmentreturn

243、s,althoughinsomecasestheyarebasedonachievingspecificservicestandards.Generally,thecompanyisentitledtoperformancefeesonlyifthereturnsontherelatedportfoliosexceedagreed-uponperiodicorcumulativereturntargets.Ifthesetargetsarenotexceeded,performancefeesforthatperiodwillnotbeearnedand,iftargetsarebasedon

244、cumulativereturns,thecompanymaynot19TableofContents earnperformancefeesinfutureperiods.Performancefeeswillvaryfromperiodtoperiodinrelationtovolatilityininvestmentreturnsandthetimingofrevenuerecognition,causingourearningstobemorevolatile.Distribution of earnings of our subsidiaries may be subject to

245、limitations,including net capital requirements.Substantiallyallofouroperationsareconductedthroughoursubsidiaries.Asaresult,ourcashflowandourabilitytofundoperationsaredependentupontheearningsofoursubsidiariesandthedistributionofearnings,intercompanyloansorotherpaymentsbyoursubsidiariestous.Anypayment

246、stousbyoursubsidiariescouldbesubjecttostatutoryorcontractualrestrictionsandarecontingentuponoursubsidiariesearningsandbusinessconsiderations.Forexample,certainofoursubsidiariesarerequiredunderapplicablelawsandregulationstomaintainappropriatelevelsofcapital.Suchrequirementsmaychangefromtime-to-timeas

247、additionalguidanceisreleasedbasedonavarietyoffactors,includingbalancesheetcomposition,assessmentofriskexposuresandgovernanceandreviewfromregulators.Theseandothersimilarprovisionsofapplicablelawsandregulationsmayhavetheeffectoflimitingwithdrawalsofcapital,repaymentofintercompanyloansandpaymentofdivid

248、endsbysuchentities.AllofourregulatedEUsubsidiariesaresubjecttoconsolidatedcapitalrequirementsunderEUDirectives,includingthosearisingfromtheEUsCapitalRequirementsDirectiveandtheU.K.sInternalCapitalAdequacyAssessmentProcess(ICAAP),andcapitalismaintainedwithinthissub-grouptosatisfytheseregulations.Weme

249、ettheserequirementsinpartbyholdingcashandcashequivalents.ThisretainedcashcanbeusedforgeneralbusinesspurposesintheEuropeansub-groupinthecountrieswhereitislocated.Duetothecapitalrestrictions,theabilitytotransfercashbetweencertainjurisdictionsmaybelimited.Inaddition,transfersofcashbetweeninternationalj

250、urisdictionsmayhaveadversetaxconsequences.AsofDecember31,2018,thecompanysminimumregulatorycapitalrequirementwas$720.2million.ComplyingwithourregulatorycommitmentsmayresultinanincreaseinthecapitalrequirementsapplicabletotheEuropeansub-group.Asaresultofcorporaterestructuringandregulatoryrequirements,c

251、ertainoftheseEUsubsidiariesmayberequiredtolimittheirdividendstotheultimateparentcompany,InvescoLtd.Ourfinancialconditionorliquiditycouldbeadverselyaffectedifcertainofoursubsidiariesareunabletodistributefundstous.We are exposed to a number of risks arising from our international operations.Weoperatei

252、nanumberofjurisdictionsoutsideoftheUnitedStates.WehaveofficesinnumerouscountriesandsponsormanycrossborderandlocalproprietaryfundsthataredomiciledoutsidetheUnitedStatesandmayfacedifficultiesinmanaging,operatingandmarketingourinternationaloperations.Ourinternationaloperationsexposeustothepoliticalande

253、conomicconsequencesofoperatinginforeignjurisdictionsandsubjectustoexpropriationrisks,expatriationcontrolsandpotentialadversetaxconsequences.Since many of our subsidiary operations are located outside of the United States and have functional currencies other than the U.S.Dollar,changes in theexchange

254、 rates to the U.S.Dollar affect our reported financial results from one period to the next.Thelargestcomponentofournetassets,revenuesandexpenses,aswellasourAUM,ispresentlydenominatedinU.S.dollars.However,wehavealargenumberofsubsidiariesoutsideoftheUnitedStateswhosefunctionalcurrenciesarenottheU.S.Do

255、llar.Asaresult,fluctuationsintheexchangeratestotheU.S.Dollaraffectourreportedfinancialresultsfromoneperiodtothenext.Consequently,significantstrengtheningoftheU.S.DollarrelativetotheU.K.PoundSterling,Euro,orCanadianDollar,amongothercurrencies,couldhaveamaterialnegativeimpactonourreportedfinancialresu

256、lts.Terrorist activity and the continued threat of terrorism,as well as increased geopolitical unrest could adversely affect the global economy or specificinternational,regional and domestic markets,which may cause our AUM,revenue and earnings to decline.Terroristactivityandthecontinuedthreatofterro

257、rismandactsofcivilorinternationalhostility,bothwithintheUnitedStatesandabroad,aswellasongoingmilitaryandotheractionsandheightenedsecuritymeasuresinresponsetothesetypesofthreats,maycausesignificantvolatilityanddeclinesintheglobalmarkets,lossoflife,propertydamage,disruptionstocommerceandreducedeconomi

258、cactivity.Continuedgeopoliticalunrestandterroristactivitythatadverselyaffecttheglobaleconomy,capitalmarketsorspecificinternational,regionalordomesticmarketsmaycauseourAUM,revenueandearningstodecline.20TableofContents Failure to establish adequate controls and risk management policies,the circumventi

259、on of controls and policies or fraud could have an adverse effect on ourreputation and financial position.Wehaveestablishedacomprehensiveriskmanagementprocessandcontinuetoenhancevariouscontrols,procedures,policiesandsystemstomonitorandmanageriskstoourbusiness;however,wecannotbeassuredthatsuchcontrol

260、s,procedures,policiesandsystemswillsuccessfullyidentifyandmanageinternalandexternalriskstoourbusiness.Wearesubjecttotheriskthatouremployees,contractorsorotherthirdpartiesmaydeliberatelyseektocircumventestablishedcontrolstocommitfraud(includingthroughcyberbreaches)oractinwaysthatareinconsistentwithou

261、rcontrols,policiesandprocedures.Persistentorrepeatedattemptsinvolvingconflictsofinterests,circumventionofpoliciesandcontrolsorfraudcouldhaveamateriallyadverseimpactonourreputationandcouldleadtocostlyregulatoryinquiries.Our business is vulnerable to deficiencies and failures in support systems and cu

262、stomer service functions that could lead to breaches and errors orreputational harm,resulting in loss of customers or claims against us or our subsidiaries.Inadditiontoinvestmentmanagement,ourservicesincludefundadministration,sales,distribution,marketing,shareholderservicingandtrust,custodyandotherf

263、iduciaryservices.Inordertobecompetitiveandcomplywithouragreements,wemustproperlyperformourfundandportfolioadministrationandrelatedresponsibilities,includingportfoliorecordkeepingandaccounting,securitypricing,corporateactions,investmentrestrictionscompliance,dailynetassetvaluecomputations,accountreco

264、nciliationsandrequireddistributionstofundshareholders.Theabilitytoconsistentlyandreliablyobtainaccuratesecuritiespricinginformation,processclientportfolioandfundshareholdertransactionsandprovidereportsandothercustomerservicetofundshareholdersandclientsinaccountsmanagedbyusisessentialtoourcontinuings

265、uccess.Certaintypesofsecuritiesmayexperienceliquidityconstraintsthatwouldrequireincreaseduseoffairvaluepricing,whichisdependentoncertainsubjectivejudgmentsthathavethepotentialtobechallenged.Anydelaysorinaccuraciesinobtainingpricinginformation,processingsuchtransactionsorsuchreportsorotherbreachesand

266、errorsandanyinadequaciesinothercustomerservice,couldresultinreimbursementobligationsorotherliabilities,oralienateclientsordistributorsandpotentiallygiverisetoclaimsagainstus.Ourcustomerservicecapability,aswellasourabilitytoobtainpromptandaccuratesecuritiespricinginformationandtoprocesstransactionsan

267、dreports,ishighlydependentoncommunicationsandinformationsystemsandonthird-partyserviceproviders.Certainoftheseprocessesinvolveadegreeofmanualinput,andthusproblemscouldoccurfromtime-to-timeduetohumanerror.Ourfailuretoproperlyperformandmonitorouroperationsorourotherwisesufferingdeficienciesandfailures

268、inthesesystemsorservicefunctionscouldresultinmaterialfinanciallossorcosts,regulatoryactions,breachofclientcontracts,reputationalharmorlegalclaimsandliability,whichinturncouldhaveanegativeeffectonourrevenuesandprofitability.The failure of one of our third party service providers or other key vendors

269、to fulfill its obligations could have a material adverse effect on our reputation orbusiness,which may cause our AUM,revenue and earnings to decline.Wedependonthirdpartyserviceprovidersandotherkeyvendorsforvariousfundadministration,accounting,custody,riskanalytics,marketdata,marketindicesandtransfer

270、agentroles,andotherdistributionandoperationalneeds.Ifourthirdpartyserviceprovidersorotherkeyvendorsfailtofulfilltheirobligationstous,itcouldleadtooperationalandregulatoryproblems,includingwithrespecttocertainofourproducts,whichcouldresultinlosses,enforcementactions,orreputationalharmandmaycauseourAU

271、M,revenueandearningstodecline.The carrying value of goodwill and other intangible assets on our balance sheet could become impaired,which would adversely affect our results ofoperations.Wehavegoodwillandindefinite-livedintangibleassetsonourbalancesheetthataresubjecttoannualimpairmentreviews.Wealsoha

272、vedefinite-livedintangibleassetsonourbalancesheetthataresubjecttoimpairmenttestingifindicatorsofimpairmentareidentified.Goodwillandintangibleassetstotaled$7,157.1millionand$2,176.1million,respectively,atDecember31,2018.Wemaynotrealizethevalueofsuchassets.Weperformimpairmentreviewsofthebookvaluesofth

273、eseassetsonanannualbasisormorefrequentlyifimpairmentindicatorsarepresent.Avarietyoffactorscouldcausesuchbookvaluestobecomeimpaired.Shouldvaluationsbedeemedtobeimpaired,awrite-downoftherelatedassetswouldoccur,adverselyaffectingourresultsofoperationsfortheperiod.SeeItem7,“ManagementsDiscussionandAnaly

274、sisofFinancialConditionandResultsofOperations-CriticalAccountingPolicies-Goodwill”and“-Intangibles,”foradditionaldetailsofourimpairmentanalysisprocess.21TableofContents If we are unable to successfully recover from a disaster or other business continuity problem,we could suffer material financial lo

275、ss,loss of human capital,regulatory actions,reputational harm or legal liability.Ifweweretoexperiencealocalorregionaldisasterorotherbusinesscontinuityproblem,suchasapandemicorothernaturalorman-madedisaster,ourcontinuedsuccesswilldepend,inpart,ontheavailabilityofourpersonnel,ourofficefacilitiesandthe

276、properfunctioningofourcomputer,telecommunicationandotherrelatedsystemsandoperations.Insuchanevent,webelieveouroperationalsize,themultiplelocationsfromwhichweoperate,andourexistingback-upsystemsshouldmitigateadverseimpacts.Nevertheless,wecouldstillexperiencenear-termoperationalproblemswithregardtopar

277、ticularareasofouroperations.Further,aswestrivetoachievecostsavingsbyshiftingcertainbusinessprocessestolower-costgeographiclocationssuchasIndia,thepotentialforparticulartypesofnaturalorman-madedisasters,political,economicorinfrastructureinstabilities,orothercountry-orregion-specificbusinesscontinuity

278、risksincreases.Althoughweseektoassessregularlyandimproveourexistingbusinesscontinuityplans,amajordisaster,oronethataffectedcertainimportantoperatingareas,orourinabilitytorecoversuccessfullyshouldweexperienceadisasterorotherbusinesscontinuityproblem,couldmateriallyinterruptourbusinessoperationsandcau

279、sematerialfinancialloss,lossofhumancapital,regulatoryactions,reputationalharmorlegalliability.We operate in an industry that is highly regulated in many countries,and any enforcement action or adverse changes in the laws or regulations governingour business could decrease our revenues and profitabil

280、ity.Aswithallinvestmentmanagementcompanies,ouractivitiesarehighlyregulatedinalmostallcountriesinwhichweconductbusiness.Lawsandregulationsappliedatthenational,stateorprovincialandlocallevelgenerallygrantgovernmentalagenciesandindustryself-regulatoryauthoritiesbroadadministrativediscretionoverouractiv

281、ities,includingthepowertolimitorrestrictourbusinessactivities,conductexaminations,riskassessments,investigationsandcapitaladequacyreviewsandimposeremedialprogramstoaddressperceiveddeficiencies.Asaresultofregulatoryoversight,wecouldfacerequirementswhichnegativelyimpactthewayinwhichweconductbusiness,i

282、ncreasecompliancecostsand/orimposeadditionalcapitalrequirements.Ourregulatorslikewisehavetheauthoritytocommenceenforcementactionswhichcouldleadtosanctionsuptoandincludingtherevocationoflicensestooperatecertainbusinesses,thesuspensionorexpulsionfromaparticularjurisdictionormarketofanyofourbusinessorg

283、anizationsortheirkeypersonnelortheimpositionoffinesandcensuresonusorouremployees.Judgmentsorfindingsofwrongdoingbyregulatoryorgovernmentalauthorities,orinprivatelitigationagainstus,couldaffectourreputation,increaseourcostsofdoingbusinessand/ornegativelyimpactourrevenues.Anyoftheeffectsdiscussedabove

284、couldhaveamaterialnegativeimpactonourresultsofoperations,financialconditionorliquidity.AsubstantialportionoftheproductsandservicesweofferareregulatedbytheSecuritiesandExchangeCommission(SEC),FinancialIndustryRegulatoryAuthority(FINRA),theCommoditiesFutureTradingCommission(CFTC),theNationalFuturesAss

285、ociation(NFA)andtheTexasDepartmentofBankingintheUnitedStatesandbytheFinancialConductAuthority(FCA)andthePrudentialRegulatoryAuthority(PRA)intheUnitedKingdom.SubsidiariesoperatingintheEuropeanUnion(EU)aresubjecttovariousEUDirectives,whichgenerallyareimplementedbymemberstatenationallegislationandbyEUR

286、egulations.Ouroperationselsewhereintheworldareregulatedbysimilarregulatoryorganizations.Theregulatoryenvironmentinwhichweoperatefrequentlychangesandhasseenasignificantincreaseinregulationinrecentyears.Variouschangesinlawsandregulationshavebeenenactedorotherwiseimplementedinmultiplejurisdictionsgloba

287、llyinresponsetothecrisisinthefinancialmarketsthatbeganin2007.Variousotherproposalsremainunderconsiderationbylegislators,regulators,othergovernmentofficialsandotherpublicpolicycommentators.Certainenactedprovisionsandcertainotherproposalsarepotentiallyfarreachingand,dependingupontheirimplementation,co

288、uldhaveamaterialimpactonourbusiness.Whilecertainoftheseprovisionsappeartoaddressperceivedproblemsinthebankingsector,somewillormaybeappliedmorebroadlyandaffectotherfinancialservicescompanies,includinginvestmentmanagers.WhileInvescodoesnotbelievethatthethesepost-crisisdevelopmentshaveorwillfundamental

289、lychangetheinvestmentmanagementindustryorcauseInvescotoreconsideritsbasicstrategy,certainprovisionshaverequired,andotherprovisionswillormayrequire,ustochangeorimposenewlimitationsonthemannerinwhichweconductbusiness;theyalsohaveincreasedregulatoryburdensandrelatedcompliancecosts,andwillormaycontinuet

290、odoso.Morebroadly,wemaybeadverselyaffectedasaresultofneworrevisedlegislationorregulationsorbychangesintheinterpretationorenforcementofexistinglawsandregulations.Totheextentthatexistingregulationsareinterpretedoramendedorfutureregulationsareadoptedinamannerthatreducesthesale,orincreasestheredemptions

291、,ofourproductsandservices,orthatnegativelyaffectstheinvestmentperformanceofourproductsorimpactsourproductmix,ouraggregateAUMandourrevenuescouldbeadverselyaffected.Inaddition,regulatorychangeshaveimposedandmaycontinuetoimposeadditionalcostsorcapitalrequirements,whichcouldnegativelyimpactourprofitabil

292、ityorreturnonequity.22TableofContents TheEUhaspromulgatedorisconsideringvariousneworreviseddirectivespertainingtofinancialservices,includinginvestmentmanagers.Suchdirectivesareprogressingatvariousstages,andgenerallyhavebeen,arebeingorwillorwouldbeimplementedbynationallegislationinmemberstates.Ongoin

293、gchangesintheEUsregulatoryframeworkapplicabletoourbusiness,includingchangesrelatedtoBrexitandanyotherchangesinthecompositionoftheEUsmemberstates,mayaddfurthercomplexitytoourglobalrisksandoperations.Developmentsunderregulatorychangeswillormayinclude,withoutlimitation:Neworincreasedcapitalrequirements

294、andrelatedregulation.LimitationsonholdingsofcertaincommoditiesunderproposedregulationsoftheCFTCwhichcouldresultincapacityconstraintsforourproductsthatemploycommoditiesaspartoftheirinvestmentstrategy.RegulationsimpactingthestandardofcareafinancialadviserowestoitsclientsincludingtheSECsproposedbestint

295、erestsstandard.Otherchangestothedistributionofinvestmentfundsandotherinvestmentproducts.In2015,theFCAundertookastudyoftheassetmanagementindustryandreleasedtheirfinalreportinJune2017.Thereporthighlightedanumberofspecificindustryissuesandproposedanumberofremediesthatwilltakeplaceinanumberofstages,incl

296、uding:changestogovernance,changestofeestructurestoprovideclientswithincreasedtransparency,improveddisclosureinclientdocumentation,improvedabilityforretailclientstochangeshareclassesandchangestopensionpoolingandinvestmentconsultantregulationsintheinstitutionalsegment.TheMarketsinFinancialInstrumentsD

297、irectiveII(MiFIDII)intheEU,effectiveinJanuary2018,seekstopromoteasinglemarketforwholesaleandretailtransactionsinfinancialinstruments.MiFIDIIaddressestheconductofbusinessrulesforintermediariesprovidinginvestmentservicesandtheeffective,efficientandsafeoperationoffinancialmarkets.KeyelementsofMiFIDIIar

298、etheextenttowhichretrocessionsmaybepaidandtheuseoftradingcommissionstofundresearch.BeginninginJanuary2018,thecompanyhasabsorbedexternalresearchcostsincurredforMiFIDIIimpactingfundsandclientaccountsinEurope.WhiletheforegoingprovisionsonlyimpacttheEU,client-drivencompetitivepressuresmaycauseanexpansio

299、noftheseprinciplestootherbusinessregionsinwhichweoperate,includingtheUnitedStates.Anincreasedfocusonliquidityinfunds(includingfixedincomefunds),anexampleofwhichistheSECsruleswithrespecttoliquidityandliquidityriskmanagementapplicabletocertaintypesofregisteredU.S.fundsthattookeffectin2018.Increasedreq

300、uirementstoprovideregulatorsandinvestorsmoregranulardetailregardingourproductsandservices,includingtheSECsreportingmodernizationruleapplicabletocertaintypesofregisteredU.S.fundsthattookeffectin2018.Regulationspertainingtotheprivacyofdatawithrespecttoclients,employeesandbusinesspartners.Inparticular,

301、effectiveMay25,2018,theEUsGeneralDataProtectionRegulation(GDPR)hasstrengtheneddataprotectionrulesforindividualswithintheEUandtheexportofdataoutsideoftheEU.AfailuretocomplywithGDPRcouldresultinfinesupto20millionEurosor4%ofourannualrevenues,whicheverishigher.Increasedregulatoryscrutinyonoperationsofpr

302、ivatecapitalfunds.Requirementspertainingtothetradingofsecuritiesandotherfinancialinstruments,suchasswapsandotherderivatives,includingcertainprovisionsoftheDodd-FrankActandEuropeanMarketInfrastructureRegulation;theseincludesignificantreportingrequirements,designatedtradingvenues,mandatedcentralcleari

303、ngarrangements,restrictionsonproprietarytradingbycertainfinancialinstitutions,otherconductrequirementsandpotentiallynewtaxesorsimilarfees.Heightenedregulatoryexaminationsandinspections,includingenforcementreviews,andamoreaggressivepostureregardingcommencingenforcementproceedingsresultinginfines,pena

304、ltiesandadditionalremedialactivitiestofirmsandtoindividuals.Withoutlimitingthegeneralityoftheforegoing,regulatorsintheUnitedStatesandtheUnitedKingdomhavetakenandcanbeexpectedtocontinuetotakeamoreaggressivepostureonbringingenforcementproceedings.Enhancedlicensingandqualificationrequirementsforkeypers

305、onnel,includingtheUnitedKingdomSeniorManagersandCertificationRegime,whichbecomeseffectivein2019.Guidelinesregardingthestructureandcomponentsoffundmanagercompensationandotheradditionalrulesandregulationsanddisclosurerequirements.Certainprovisionsimposeadditionaldisclosureburdensonpubliccompanies.Cert

306、ainproposalscouldimposerequirementsformorewidespreaddisclosuresofcompensationtohighly-paidindividuals.Dependinguponthescopeofanysuchrequirements,Invescocouldbedisadvantagedinretainingkeyemployeesvis-visprivatecompanies,includinghedgefundsponsors.23TableofContents Strengtheningstandardsregardingvario

307、usethicalmatters,includingcompliancewiththeForeignCorruptPracticesAct,theU.K.BriberyActandanti-money-launderinglawsandregulations.Regulationspromulgatedtoaddressperceptionsthattheassetmanagementindustry,orcertainofitsentitiesoractivities,posesystematicriskstothefinancialsystem.Regulationspromulgated

308、toprotectpersonaldataandaddressrisksoffraud,malfeasanceorotheradverseconsequencesstemmingfromcyberattacks.OtherchangesimpactingtheidentityortheorganizationalstructureofregulatorswithsupervisoryauthorityoverInvesco.Wecannotatthistimepredictthefullimpactofpotentiallegalandregulatorychangesorpossibleen

309、forcementproceedingsonourbusiness.Suchchangeshaveimposed,andmaycontinuetoimpose,newcompliancecostsand/orcapitalrequirementsorimpactInvescoinotherwaysthatcouldhaveamaterialadverseimpactonourresultsofoperations,financialconditionorliquidity.Moreover,certainlegalorregulatorychangescouldrequireustomodif

310、yourstrategies,businessesoroperations,andwemayincurothernewconstraintsorcosts,includingtheinvestmentofsignificantmanagementtimeandresourcesinordertosatisfynewregulatoryrequirementsortocompeteinachangedbusinessenvironment.Inrecentyears,certainregulatorydevelopmentshavealsoaddeddownwardpressuresregard

311、ingfeelevels.Totheextentthatexistingorfutureregulationsaffectingthesaleofourproductsandservicesorourinvestmentstrategiescauseorcontributetoreducedsalesorincreasedredemptionsofourproducts,impairtheinvestmentperformanceofourproductsorimpactourproductmix,ourAUMandresultsofoperationsmightbeadverselyaffe

312、cted.Civil litigation and governmental investigations and enforcement actions could adversely affect our AUM and future financial results,and increase our costsof doing business.Invescoandcertainrelatedentitieshaveinrecentyearsbeensubjecttovariouslegalproceedings,includingcivillitigationandgovernmen

313、talinvestigationsandenforcementactions.Theseactionscanarisefromnormalbusinessoperationsand/ormattersthathavebeenthesubjectofpreviousregulatoryreviews.Asaglobalcompanywithinvestmentproductsregisteredinnumerouscountriesandsubjecttothejurisdictionofoneormoreregulatorsineachcountry,atanygiventime,ourbus

314、inessoperationsmaybesubjecttoreview,investigationordisciplinaryaction.Forexample,intheUnitedStates,UnitedKingdomandotherjurisdictionsinwhichthecompanyoperates,governmentalauthoritiesregularlymakeinquiries,holdinvestigationsandadministermarketconductexaminationswithrespecttothecompanyscompliancewitha

315、pplicablelawsandregulations.LawsuitsorregulatoryenforcementactionsarisingoutoftheseinquiriesmayinthefuturebefiledagainstthecompanyandrelatedentitiesandindividualsintheUnitedStates,UnitedKingdomandotherjurisdictionsinwhichthecompanyanditsaffiliatesoperate.SeeItem8,FinancialStatementsandSupplementaryD

316、ata,Note18-CommitmentsandContingencies,”foradditionalinformation.Judgmentsincivillitigationorfindingsofwrongdoingbyregulatoryorgovernmentalauthoritiesagainstuscouldaffectourreputation,increaseourcostsofdoingbusinessand/ornegativelyimpactourrevenues,anyofwhichcouldhaveamaterialnegativeimpactonourresu

317、ltsofoperations,financialconditionorliquidity.Legislative and other measures that may be taken by U.S.and/or other governmental authorities could materially increase our tax burden or otherwiseadversely affect our financial condition,results of operations or cash flows.Undercurrentlaws,asthecompanyi

318、sdomiciledandtaxresidentinBermuda,taxationinotherjurisdictionsisdependentuponthetypesandtheextentoftheactivitiesofthecompanyundertakeninthosejurisdictions.Thereisariskthatchangesineitherthetypesofactivitiesundertakenbythecompanyorchangesintaxrulesrelatingtotaxresidencycouldsubjectthecompanyanditssha

319、reholderstoadditionaltaxation.Theinternationaltaxenvironmentcontinuestochangeasaresultofbothcoordinatedactionsbygovernmentsandunilateralmeasuresdesignedbyindividualcountries,bothintendedtotackleconcernsoverbaseerosionandprofitshifting(BEPS)andperceivedinternationaltaxavoidancetechniques.Therecommend

320、ationsoftheBEPSProjectledbytheOrganizationforEconomicCooperationandDevelopment(OECD)andtheAnti-TaxAvoidanceDirective(ATAD)fromtheEuropeanUnion(EU)areinvolvedinmuchofthecoordinatedactivity.Aswithanyglobalimplementationprocessthereareconcernsaboutpotentiallackofconsistencyinthelocalapplicationofthesei

321、tems.Someoftherecommendationsarecomplexwhileotherscontainoptionalroutes,therebyincreasingthelikelihoodofonlypartialorlimitedimplementation.Althoughthetimingandmethodsofimplementationvary,severaljurisdictionshaveenactedlegislationthatisalignedwith,andinsomecasesexceedsthescopeof,theOECDsrecommendatio

322、ns.Thiscouldleadtoincreaseduncertaintywithtaxpositionsaswellasincreasethepotentialfordoubletaxation.24TableofContents In2018,theEUintroducedmandatorydisclosurerules(DAC6)requiringdisclosuretotaxauthoritiesofcross-borderarrangementsenteredintobytaxpayersthatfallwithincertain,broadlydefinedhallmarks.T

323、herealsoareseparatetransitionalrulesthatrequireseparatereportingforanydisclosabletransactionsoccurringaftertheJune25,2018effectivedate.OnJuly1,2018,theOECDenactedtheMultilateralConventiontoImplementTaxTreatyRelatedMeasurestoPreventBaseErosionandProfitShifting(theMultilateralInstrumentorMLI).TheMLIim

324、plementsseveralBEPSinitiatives:Action2-hybridmismatcharrangements;Action6-treatyabuse;Action7-definitionofpermanentestablishment;andAction14-mutualagreementprocedures(MAP)aswellasarbitration.Additionally,afewEUcountrieshaveenactedorproposedataxondigitalservicesinresponsetoaninabilitytoagreeonanEUwid

325、eproposal.WecontinuallyassesstheimpactofvariousU.S.federal,stateandforeignlegislativeproposals,andmodificationstoexistingtaxtreatiesbetweentheUnitedStatesandforeigncountries,whichcouldresultinamaterialincreaseinourU.S.federal,stateorforeigntaxes.Wecannotpredicttheoutcomeofanyspecificlegislativepropo

326、sals.However,ifsuchproposalsweretobeenacted,orifmodificationsweretobemadetocertainexistingtaxtreaties,theconsequencescouldhaveamateriallyadverseimpactonthecompany,includingincreasingourtaxburden,increasingcostsofourtaxcomplianceorotherwiseadverselyaffectingourfutureresultsofoperations,financialcondi

327、tionorliquidity.OnJune21,2018,inSouthDakotav.Wayfair,Inc.(Wayfair),theU.S.SupremeCourtoverruledpriorCourtdecisionsthathadprecludedstatesfromimposingasalesandusetaxcollectionobligationonsellersunlesstheyhadaphysicalpresenceinthestate.TheWayfairdecisionisexpectedtoincreasestatenexusexpansionasmorestat

328、esturntoeconomicnexusthresholdlawsandawayfromphysicalpresencenexustests.TheTaxCutsandJobsAct(the2017TaxAct)enactedonDecember22,2017,significantlyreformedthetaxationofbusinessentities.Thenewlegislation,amongotherthings,includeschangestoU.S.federaltaxrates,imposessignificantadditionallimitationsonthed

329、eductibilityofinterest,allowsfortheexpensingofcapitalexpenditures,andputsintoeffectthemigrationfroma“worldwide”systemoftaxationtoaterritorialsystem.Thescopeandbreadthofthechangesandthevolumeofregulationsandguidanceissuedtodateandyettobeissuedmeanstheultimateimpactofthe2017TaxActonourbusinessandfinan

330、cialconditionremainstobedetermined.OnOctober21,2016,theUnitedStatesTreasuryandtheIRSpublishedfinalandtemporaryregulationsundersection385oftheInternalRevenueCode(385Regulations)thattargettheinboundfinancingofaforeign-parentedmultinationalgroupsU.S.subsidiaries.Therearenoimmediateimpactstothecompanysf

331、inancialpositionasaresultoftheapplicationofthe385Regulations,however,inthefuturetheycouldlimitourabilitytoefficientlyfinanceorotherwisechoosebetweendebtandequitytransactionswithourU.S.subsidiaries.Examinations and audits by tax authorities could result in additional tax payments for prior periods.Th

332、ecompanyanditssubsidiariesaresubjecttoincometaxesaswellasnon-incomebasedtaxes,inboththeUnitedStatesandvariousforeignjurisdictionsandaresubjecttoongoingtaxauditsinvariousjurisdictions.Thecalculationofourtaxliabilitiesinvolvesdealingwithuncertaintiesintheapplicationofcomplextaxregulationsinamultitudeo

333、fjurisdictionsacrossourglobaloperations.Taxauthoritiesmaydisagreewithcertainpositionswehavetakenandassessadditionaltaxes(and,incertaincases,interest,finesorpenalties).Werecognizepotentialliabilitiesandrecordtaxliabilitiesforanticipatedtaxauditissuesbasedonourestimateofwhether,andtheextenttowhich,additionalincometaxeswillbedue.Weadjusttheseliabilitiesinlightofchangingfactsandcircumstances.Duetothe